Download this Paper Open PDF in Browser

Multi-Homing Users’ Preferences for Two-Sided Exchange Networks

MIS Quarterly, 2014, 38(4), pp. 977-996

54 Pages Posted: 7 Jul 2010 Last revised: 23 Sep 2014

Tat Koon Koh

Hong Kong University of Science & Technology (HKUST) - Department of Information Systems, Business Statistics and Operations Management

Mark Fichman

Carnegie Mellon University - Graduate School of Industrial Administration

Abstract

Online Business-to-Business (B2B) exchanges are proliferating, giving firms numerous platforms to choose from. Many firms are also multi-homing, using competing platforms concurrently. In this study, we examine how selling and buying activities on B2B exchanges affect multi-homing buyers’ preferences for exchanges. We posit that these activities influence buyers’ perceived returns and risks of using the exchanges, and impact buyers’ preferences. Using a unique dataset of 118 buyers’ participation in two B2B exchanges over seven months, we find that buyers prefer exchanges with more selling activities. However, buyers’ preferences and buying levels on the exchanges are non-monotonically related. At low buying levels, an increase in buying by others positively affect buyers’ preferences. This effect may result from observational learning, where individual buyers learn from other buyers’ behaviors. On the other hand, as buying level increases further on the exchange, competition among buyers also increases. Consequently, buyers lower their preferences for the exchange. In addition, we find that the effects of selling and buying activities on buyers’ preferences change over time. Our results highlight the need to correctly model buyers’ homing behavior; failing to do so could bias the picture of competitive dynamics between platforms and lead to sub-optimal strategies by exchanges.

Keywords: Online platforms, B2B exchanges, multi-homing, network effects, observational learning

Suggested Citation

Koh, Tat Koon and Fichman, Mark, Multi-Homing Users’ Preferences for Two-Sided Exchange Networks. MIS Quarterly, 2014, 38(4), pp. 977-996. Available at SSRN: https://ssrn.com/abstract=1635615 or http://dx.doi.org/10.2139/ssrn.1635615

Tat Koon Koh (Contact Author)

Hong Kong University of Science & Technology (HKUST) - Department of Information Systems, Business Statistics and Operations Management ( email )

Clear Water Bay
Kowloon
Hong Kong

Mark Fichman

Carnegie Mellon University - Graduate School of Industrial Administration ( email )

Pittsburgh, PA 15213-3890
United States

Paper statistics

Downloads
323
Rank
77,669
Abstract Views
1,474