Market Orchestrators: The Effects of Certification on Complementor Behavior and Performance

52 Pages Posted: 28 Feb 2018 Last revised: 8 Dec 2018

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: December 7, 2018

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 its users through the enactment of governance strategies. Selective promotion of a subset of the platform’s users through certification is often part of this “market orchestration” process. We study how certification of complementors affects the bundle of products offered by those complementors as well as how it affects the platform’s demand-side users. 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 late 2011. We show that Kiva’s certification leads badged microfinance institutions to reorient their loan portfolio composition and that the extent of portfolio reorientation varies across microfinance institutions, depending on demand and supply-side factors. We further show that certified microfinance institutions who reorient their loan portfolios along the dimension of the certification gain greater demand-side benefits than certified microfinance institutions who do not reorient 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 Certification on Complementor Behavior and Performance (December 7, 2018). 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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