TY - JOUR
T1 - Market orchestrators
T2 - The effects of certification on platforms and their complementors
AU - Rietveld, Joost
AU - Seamans, Robert
AU - Meggiorin, Katia
N1 - Publisher Copyright:
Copyright: © 2021 The Author(s)
PY - 2021
Y1 - 2021
N2 - We study how a multisided platform's decision to certify a subset of its complementors affects those complementors and ultimately the platform itself. Kiva, a microfinance platform, introduced a social performance badging program in December 2011. The badging program appears to have been beneficial to Kiva-it led to more borrowers, lenders, total funding, and amount of funding per lender. To better understand the mechanisms behind this performance increase, we study how the badging program changed the bundle of products offered by Kiva's complementors. We find that Kiva's certification leads badged microfinance institutions to reorient their loan portfolio composition to align with the certification and that the extent of portfolio reorientation varies across microfinance institutions, depending on underlying demand- and supply-side factors. We further show that certified microfinance institutions that do align their loan portfolios enjoy stronger demand-side benefits than do certified microfinance institutions that do not align their loan portfolios. We therefore demonstrate that platforms can influence the product offerings and performance of their complementors-and, subsequently, the performance of the ecosystem overall-through careful enactment of governance strategies, a process we call "market orchestration".
AB - We study how a multisided platform's decision to certify a subset of its complementors affects those complementors and ultimately the platform itself. Kiva, a microfinance platform, introduced a social performance badging program in December 2011. The badging program appears to have been beneficial to Kiva-it led to more borrowers, lenders, total funding, and amount of funding per lender. To better understand the mechanisms behind this performance increase, we study how the badging program changed the bundle of products offered by Kiva's complementors. We find that Kiva's certification leads badged microfinance institutions to reorient their loan portfolio composition to align with the certification and that the extent of portfolio reorientation varies across microfinance institutions, depending on underlying demand- and supply-side factors. We further show that certified microfinance institutions that do align their loan portfolios enjoy stronger demand-side benefits than do certified microfinance institutions that do not align their loan portfolios. We therefore demonstrate that platforms can influence the product offerings and performance of their complementors-and, subsequently, the performance of the ecosystem overall-through careful enactment of governance strategies, a process we call "market orchestration".
KW - Certification
KW - Complementors
KW - Multisided platforms
KW - Platform governance
KW - Sharing economy
UR - http://www.scopus.com/inward/record.url?scp=85116574596&partnerID=8YFLogxK
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U2 - 10.1287/STSC.2021.0135
DO - 10.1287/STSC.2021.0135
M3 - Article
AN - SCOPUS:85116574596
SN - 2333-2050
VL - 6
SP - 244
EP - 264
JO - Strategy Science
JF - Strategy Science
IS - 3
ER -