Competing With a Crowd: Informally Organized Individuals as Platform Complementors

38 Pages Posted: 18 Apr 2011 Last revised: 30 Apr 2013

See all articles by Kevin Boudreau

Kevin Boudreau

Northeastern University; National Bureau of Economic Research (NBER)

Lars Bo Jeppesen

Copenhagen Business School - Department of Strategy and Innovation

Date Written: February 1, 2012

Abstract

Platform complementors are increasingly organized as “crowds” of individual producers working outside formal relationships – rather than as complementor firms. As crowds are motivated differently from firms in a market, here we hypothesize that the best way to stimulate complementary development differs from usual “grow-the-platform” strategies known from earlier platform studies. In crowd complementary development on online multiplayer games, we find that strategies intended to stimulate crowd complementary development by boosting platform usage did so (elasticity of .45), even when the crowd received no cash payments from users. However, boosting the size of the crowd itself had no impact on subsequent development rates or network effects. We found evidence that strategies more directly geared to inducing complementary innovation (i.e., an inducement prize) had much greater impact.

Keywords: two-sided platforms, platform strategy, crowds, digital innovation, motivations

JEL Classification: L1, O31, D03

Suggested Citation

Boudreau, Kevin and Jeppesen, Lars Bo, Competing With a Crowd: Informally Organized Individuals as Platform Complementors (February 1, 2012). Available at SSRN: https://ssrn.com/abstract=1812084 or http://dx.doi.org/10.2139/ssrn.1812084

Kevin Boudreau (Contact Author)

Northeastern University ( email )

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HOME PAGE: http://www.kevinboudreau.com

National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
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Lars Bo Jeppesen

Copenhagen Business School - Department of Strategy and Innovation ( email )

Kilevej 14A
Frederiksberg C, DK - 2000
Denmark

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