Market Orchestrators: The Effects of Platform Certification on Complementor Behavior

41 Pages Posted: 28 Feb 2018 Last revised: 13 Nov 2019

See all articles by Joost Rietveld

Joost Rietveld

UCL School of Management

Robert Seamans

New York University (NYU) - Leonard N. Stern School of Business

Katia Meggiorin

New York University (NYU), Leonard N. Stern School of Business, Department of Management and Organizational Behavior, Students

Date Written: November 12, 2019

Abstract

Multisided platforms serve two or more sets of users who are connected via an indirect network effect. Beyond pricing, the extent and scope of the interactions between the platform’s users depend on various other factors including product quality, exclusivity and users’ heterogeneous preferences. Platforms thus have to carefully balance the needs of their users through the enactment of governance strategies. Certification of a subset of the platform’s users through badging is often part of this “market orchestration” process. We study how a platform’s certification of supply-side users (or, complementors) affects the bundle of products offered by complementors and we describe conditions under which complementors may have heterogeneous responses to certification. We use a unique dataset of Kiva’s microfinance platform to take advantage of a quasi-exogenous shock: Kiva’s unexpected introduction of the Social Performance badging program in December, 2011. We show that Kiva’s certification leads badged microfinance institutions to reorient their loan portfolio composition to align with the dimension of the certification and that the extent of portfolio reorientation varies across microfinance institutions, depending on underlying supply-side and demand-side factors. We further show that microfinance institutions who do align their loan portfolios with the certification enjoy stronger demand-side benefits than certified microfinance institutions who do not align their loan portfolios.

Keywords: multisided platforms, platform governance, complementors, certification, sharing economy

Suggested Citation

Rietveld, Joost and Seamans, Robert and Meggiorin, Katia, Market Orchestrators: The Effects of Platform Certification on Complementor Behavior (November 12, 2019). Available at SSRN: https://ssrn.com/abstract=3131553 or http://dx.doi.org/10.2139/ssrn.3131553

Joost Rietveld (Contact Author)

UCL School of Management ( email )

Level 38, One Canada Square, Canary Wharf
London, E14 5AA
United Kingdom

HOME PAGE: http://www.strategyguide.nl

Robert Seamans

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Katia Meggiorin

New York University (NYU), Leonard N. Stern School of Business, Department of Management and Organizational Behavior, Students ( email )

44 West 4th Street
New York City, NY 10012
United States

HOME PAGE: http://www.stern.nyu.edu/experience-stern/about/departments-centers-initiatives/academic-departments

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