Market Orchestrators: the Effect of Platform Certification on Complementor Behavior
44 Pages Posted: 28 Feb 2018 Last revised: 4 Oct 2018
Date Written: September 26, 2018
Platforms need to carefully balance the needs of their customers and complementors. Certification of complementors is often used as part of this complex “market orchestration” process. We study how a platform’s use of certification affects complementors’ behavior, as pertains to the bundle of products offered. We use a unique dataset of Kiva’s microfinance platform to take advantage of a quasi-exogenous shock: Kiva’s unexpected introduction of a certification program of its complementors in late 2011. We show that Kiva’s certification leads microfinance institutions to reorient their loan portfolio composition. We further show that these effects vary across complementors depending on demand-side and supply-side factors. We interpret our results to suggest that there are limits to the extent platforms can influence the behavior of complementors.
Keywords: platforms, platform governance, complementors, certification, sharing economy
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