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Platform Governance in the Sharing Economy: Interplay Between Public and Private Regulators
AbstractAbstract
We built a multi-stage dynamic game model to analyze how to effectively regulate opportunistic behaviors in the sharing economy. We elaborate this under three different scenarios: sellers under (1) public regulation by the government, (2) private regulation by the platform owner, and (3) co-regulation by the government and the platform owner. We found that if the scale of the platform is large enough, both product quality and inspecting efforts in scenario (2) are higher than in scenario (1); on the other hand, if the joint liability of the platform is large enough, the product quality in (3) is the highest of the three scenarios. The relationship–both complementary and substitutable–is also discussed between the public regulator and the private regulator.Coevolution of Platform Dominance and Governance Strategies: Effects on Complementor Performance Outcomes
AbstractAbstract
Multisided platforms such as Apple’s App Store and Valve’s Steam become increasingly dominant when more end users and complement producers join their ecosystems. Despite their importance to a platform’s overall success, however, we know little about complement producers and how they are affected by a platform’s dominance trajectory: How does a platform’s increasingly dominant market position affect performance outcomes for complementors? We explore this question by conducting a multiple case study on four market leading platform ecosystems over several years. We discover that, as a platform becomes increasingly dominant, the platform sponsor’s governance strategies shift from being largely supportive of the wider complement population to becoming more selective and geared toward end users. These changes are associated with shifts in complementor performance outcomes. Although the value created at the overall ecosystem level increases as a platform gains dominance, average demand for individual complements decreases and becomes progressively concentrated. Furthermore, we find that prices for complements decline, whereas the costs complementors incur increase. These findings are particularly salient in the context of digital platform ecosystems, where platform sponsors can seamlessly alter their technological infrastructures and implement changes to extend and solidify their dominant positions.Whiteboard Video
