Talking about Platforms: Recent Episodes
Daniel Trabucchi and Philip Meier
We bring the latest discoveries from the field platform research right into your preferred podcasting app.
Digital platforms are omnipresent in almost all of our daily activities – from booking a fitness class to sending or watching a video clip, going through calling a cab, and ordering a pizza…even listening to this podcast – are mediated by multi-sided platforms.
Talking About Platforms is the place where we discover and try to make sense of the underlying mechanisms that have enabled and facilitated the rise of the platforms. We enter a critical discussion on what they can become for people, companies, and our society.
In every episode we welcome a platform scholar who will share with us one of his/her latest pieces of research, making it accessible to everyone and chatting with us on what platforms are and where they may go in the future.
Closing episode for the first season of the TaP podcast. We cover a broad range of topics, starting at the gap between academic research and the diffusion of knowledge into practice, what skills a platform professional needs, and how this might or might not change when it comes to Web3.
Abstract from the paper we discuss with the author during the episode:
As a platform improves trust between the two sides of its market to facilitate matching and transactions, it faces an increased risk of disintermediation: with sufficient trust, the two sides may circumvent the platform to avoid the platform’s fees. In this paper, we investigate the relationship between increased trust and disintermediation by leveraging a randomized control trial in an online freelance marketplace. We find that enhanced trust increases the likelihood of high-quality freelancers being hired. However, when the trust level is sufficiently high, it also increases disintermediation, which offsets the revenue gains from the increase in hiring high-quality freelancers. We also identify heterogeneity across clients and freelancers in their tendencies to disintermediate. We discuss strategies that platforms can use to mitigate the tension between trust-building and disintermediation.
Abstract from the paper we discuss with the author during the episode:
Digital platforms have disrupted many sectors but have not yet visibly transformed highly regulated industries. This study of Big Tech entry in healthcare and education explores how platforms have begun to enter highly regulated industries systematically and effectively. We present a 4-stage process model of platform entry, which we term as “digital colonization”: (1) provision of data infrastructure services to regulated incumbents; (2) data capture in the highly regulated industry; (3) provision of data-driven insights; (4) design and commercialization of new products and services. We clarify platforms’ sources of competitive advantage in highly regulated industries and conclude with managerial and policy recommendations.
Abstract from the paper we discuss with the author during the episode:
The importance of platform‐based businesses in the modern economy is growing continuously and becoming increasingly relevant. Specifically, the deployment of digital technologies has enhanced the applicability of two‐sided business models, enabling companies to act not just as builders and owners of assets, but as orchestrators of external resources. Management research has therefore focused increasingly on the unique aspects of this model. At the center of a two‐sided platform there is a platform provider that enables a transaction between the sides, reducing the relative transaction costs. However, in recent years, a new technology emerged that challenges some of the underlying assumptions of this model: the blockchain. Blockchain enables the creation of a peer‐to‐peer network that is able to authenticate transactions, upon which applications and services may be built. It allows users to conduct transactions without the need for a central platform. We explore how blockchain technology re‐shapes two‐sided platforms, focusing in particular on the role of the platform provider. The research is based upon multiple case studies, using an inductive approach to explore this emerging phenomenon. Our findings show there is a significant shift in the role of the central player that links the two sides of a transaction using blockchain. We frame this as a shift from a "platform provider" to a "service provider", leveraging the blockchain as a Platform‐as‐a‐Service. Our work examines the peculiarities of this model, unveiling new dynamics in these businesses. Specifically, we show that different variables must be considered to classify two‐sided platforms using blockchain. Furthermore, the essential characteristics of two‐sided platforms must also be enlarged. For example, traditional platform theories emphasize the importance of cross‐side network externalities in creating value. In blockchain‐enabled platforms however, we show the use of “tokens” play a key role in creating different types of externalities between the two sides.
Abstract from the paper we discuss with the author during the episode:
Online platforms are pervasive and powerful in today's economy. We explore the increased centrality of platforms in two ways. First, we measure the extent to which platforms are insinuating themselves into the economy. We accomplish this by analyzing the presence of platforms as intermediating organizations across all US service industries at the six-digit North American Industry Classification System (NAICS) code level. Our results show that 70% of service industries, representing over 5.2 million establishments, are potentially affected by one or more platforms. Second, we undertake a detailed firm-level case study of the mega-platform, Amazon, that demonstrates the ways that the aforementioned macro-level data is expressed by a single platform firm. This case study shows that Amazon’s growth trajectory has resulted in it entering and transforming existing industries and sectors. We conclude by reflecting upon the limitations and implications for future research.
Abstract from the paper we discuss with the author during the episode:
Online labor platforms (OLPs) can use algorithms along two dimensions: matching and control. While previous research has paid considerable attention to how OLPs optimize matching and accommodate market needs, OLPs can also employ algorithms to monitor and tightly control platform work. In this paper, we examine the nature of platform work on OLPs, and the role of algorithmic management in organizing how such work is conducted. Using a qualitative study of Uber drivers’ perceptions, supplemented by interviews with Uber executives and engineers, we present a grounded theory that captures algorithmic management of work on OLPs. In the context of broad algorithmic control, platform workers experience tensions relating to execution, compensation, and belonging. We show that these tensions trigger market-like and organization-like response behaviors by platform workers. Our research contributes to the emerging literature on OLPs.
Abstract from the paper we discuss with the author during the episode
This article explores what factors drive digital platform firms to set or modify their boundaries. Building on economics, strategic management, and information systems research, I suggest that digital platforms make strategic decisions over three distinct types of interrelated boundaries: (1) the scope of the platform firm (what assets are owned, what labor is employed, and what activities are performed by the firm), (2) the configuration and composition of the platform's sides (which distinct groups of customers have access to the platform), and (3) the digital interfaces (that specify the 2-way exchange of data between the platform firm and each of its sides). In this article, I explore the interdependence between these seemingly separate decisions and the role of some important moderating variables. These moderators include whether the platform is a transaction or an innovation platform, and the extent to which the platform has developed from its initial formation stage. My work explains why we see so much variation in boundaries across platforms and over time.
Abstract from the paper we discuss with the author during the episode
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.”
Abstract from the paper we discuss with the author during the episode
Research Summary With the growth of digital platforms, understanding the role of property rights on those platforms has become increasingly important. Digital piracy, the unauthorized copying and distribution of digital products, is therefore an important strategic issue, both because of lost revenues and because it is thought to decrease innovation. Yet, while the latter effect is often argued, empirical evidence is limited. We study whether piracy affects innovation and whether it leads firms to shift to different types of innovations. By studying a large piracy event in a mobile app marketplace, we find that piracy leads to a decrease in the release of incremental innovations, such as bug fixes, but does not decrease more substantial revisions. Additionally, it is associated with subsequent new product development.
Managerial Abstract For many platform companies, a critical issue is understanding how piracy and imitation should be regulated, motivated in part by a common narrative that piracy will eliminate innovation on these platforms. The present article suggests that these effects are slightly more nuanced. We find that piracy does lead to a decline in incremental innovations, such as bug fixes or appearance tweaks, but no discernible decline in more major innovations, such as feature updates or entirely new versions. This implies that piracy can shape the type of innovation, potentially leading to products that are less polished and refined but not affecting the overall level of innovation.
In the first episode, Daniel and Philip describe in one minute what Talking about Platforms is all about, what you can look forward to and why you should definitely subscribe so you don't miss the upcoming episodes.
TaP will start with the first season of eight episodes and publish new episodes every other week.