The Coevolution of Platform Dominance and Governance Strategies: Effects on Complementor Performance Outcomes

Rietveld, Joost; Ploog, Joe N.; Nieborg, David B.

doi:10.2139/ssrn.3615719

Cited by 10 publications

(29 citation statements)

References 24 publications

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“…Besides the provision of interface-specific information to incentivize participation, several studies also find that some digital platform owners offer customer-related information and impose rules regarding what information about customers is disclosed or concealed on the platform (Kuan & Lee, 2020;Rietveld, Ploog, & Nieborg, 2020). A distinguishing characteristic is the displaying of the titles of complementary applications in a vertical ranking, revealing what products are most valued by customers (Boudreau & Hagiu, 2009).…”

Section: Provision Of Informationmentioning

confidence: 99%

“…Conventional theory characterizes changes in governance structures by focusing on the occasions "where transactional difficulties are likely to be severe" (Winter, 1988: 172). Transactional difficulties are most severe during the early stage of a platform where market uncertainty for complements is the highest, prompting the platform owner to introduce more supportive instruments and pecuniary rewards (Rietveld et al, 2020). That explains the fact that a platform sometimes acts against its own short-term financial interests to preserve its reputation for long-term benefits.…”

Section: Taking Stock: Review Of Extant Research On the Governance And Design Of Digital Platformsmentioning

confidence: 99%

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Governance and Design of Digital Platforms: A Review and Future Research Directions on a Meta-Organization

Liang

Tong²,

Tang³

et al. 2021

Journal of Management

127

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The burgeoning digital-platforms literature across multiple business disciplines has primarily characterized the platform as a market or network. Although the organizing role of platform owners is well recognized, the literature lacks a coherent approach to understanding organizational governance in the platform context. Drawing on classic organizational governance theories, this paper views digital platforms as a distinct organizational form where the mechanisms of incentive and control routinely take center stage. We systematically review research on digital platforms, categorize specific governance mechanisms related to incentive and control, and map a multitude of idiosyncratic design features studied in prior research onto these mechanisms. We further develop an integrative framework to synthesize the review and to offer novel insights into the interrelations among three building blocks: value, governance, and design. Using this framework as a guide, we discuss specific directions for future research and offer a number of illustrative questions to help advance our knowledge about digital platforms’ governance mechanisms and design features.

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Section: Provision Of Informationmentioning

confidence: 99%

Section: Taking Stock: Review Of Extant Research On the Governance And Design Of Digital Platformsmentioning

confidence: 99%

Governance and Design of Digital Platforms: A Review and Future Research Directions on a Meta-Organization

Liang

Tong²,

Tang³

et al. 2021

Journal of Management

127

View full text Add to dashboard Cite

show abstract

“…For example, Boudreau (2012) argues that competition on digital platforms may lead to competitive crowding, as the high within‐platform competition may reduce service provider incentives to participate in the platform altogether. Similarly, Rietveld et al (2020) show that as a digital platform becomes increasingly dominant, when more customers and service providers join the platform, the average demand for any individual service provider decreases, resulting in lower prices. Competitive crowding can thus result in service providers either abandoning the digital platform or not opting to participate in the platform in the first place, instead of their other, and likely more profitable, marketing and sales channels.…”

Section: Hypothesis Developmentmentioning

confidence: 97%

Same Old Song with a Different Melody: The Paradox of Market Reach and Financial Performance on Digital Platforms

Hänninen

Smedlund

2021

J Management Studies

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In the service sector, digital platforms now enable service providers to reach customers through an online marketplace and use the value‐adding complementary services offered. However, despite the widespread prevalence of digital platforms, there has been little research on the market reach and financial performance captured by service providers. We explored these service provider‐specific outcomes of digital platforms by studying a digital platform in the beauty industry. Our results show that digital platforms present a troubling paradox for service providers participating in a platform‐based online marketplace: despite increases in market reach, in terms of a higher rate of new customer acquisition, those service providers participating in the marketplace have lower sales than others. However, the ‘dark side’ of this paradox is compensated by higher sales for service providers using more of the complementary services offered by the platform. Hence, although digital platforms may open new markets and add value, service providers should be wary of their paradoxical consequences. With these findings, we contribute new theoretical and managerial insight about the service provider‐specific outcomes of digital platforms and add to the ongoing debate about firm strategies in the digital age concerning the platform economy.

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“…] (Gawer, 2010, p. 293). Thus, to comprehend platform competition (Rietveld & Schilling, 2021) and its oligopolistic tendencies requires considering how platforms' core technology structures their internal design, shapes their growth and influences industry structure (Rietveld, Ploog, & Nieborg, 2020) as well as the spectrum of possibilities regarding industry regulation. 5 While at first sight the choice to contrast blockchain with ML may seem expedient -or motivated by the hype surrounding these two technologies -it is in fact highly suitable in our context.…”

Section: Overview Of Digital Platformsmentioning

confidence: 99%

“…Another neutrality-enhancing feature found to be appealing to complementors (Rietveld et al, 2020) is having an organizational goal different from shareholder value maximization, such as when non-profit foundations (e.g. Linux, Wikimedia) oversee the development of core platform infrastructure.…”

Section: The Rise Of Decentralized Platforms: Niche Players For Surementioning

confidence: 99%

Decentralized vs. Distributed Organization: Blockchain, Machine Learning and the Future of the Digital Platform

Vergne

2020

Organization Theory

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The terms decentralized organization and distributed organization are often used interchangeably, despite describing two distinct phenomena. I propose distinguishing decentralization, as the dispersion of organizational communications, from distribution, as the dispersion of organizational decision-making. Organizations can be distributed without being decentralized (and vice versa), and having multiple management layers directly affects only distribution – not decentralization. This proposed distinction has implications for understanding the growth of digital platforms (e.g. amazon.com ), which dominate the global economy in the 21st century. While prominent platforms typically use machine learning as their core technology to transform inputs (e.g. data) into outputs (e.g. matchmaking services), blockchain has emerged as an alternative technological blueprint. I argue that blockchain enables platforms that are both decentralized and distributed (e.g. Bitcoin), whereas machine learning fosters centralized communications and the concentration of decision-making (e.g. Facebook Inc.). This distinction has crucial implications for antitrust policy, which, I contend, should shift both its analysis and its target of action away from the corporate level and focus instead on the data level. Based on this essay’s framework, I make several predictions regarding the future of competition between centralized and decentralized platforms, the evolution of government regulation, and broader implications for managers in the digital economy and for the business schools charged with their education. I conclude with reflections on the opportunity to revive cybernetic thinking for preventing a dystopian future dominated by a handful of platform behemoths.

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The Coevolution of Platform Dominance and Governance Strategies: Effects on Complementor Performance Outcomes

Cited by 10 publications

References 24 publications

Governance and Design of Digital Platforms: A Review and Future Research Directions on a Meta-Organization

Governance and Design of Digital Platforms: A Review and Future Research Directions on a Meta-Organization

Same Old Song with a Different Melody: The Paradox of Market Reach and Financial Performance on Digital Platforms

Decentralized vs. Distributed Organization: Blockchain, Machine Learning and the Future of the Digital Platform

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