Abstract

Multi-sided platforms (MSPs) such as AirBnB, Amazon, or Kickstarter are re-shaping entire industries. MSPs facilitate transactions between two or more distinct customer groups and are hence characterized by indirect network effects that arise between the distinct customer groups (Hagiu and Wright, 2015). While MSPs have attracted increasing academic interest (Thomas et al., 2014), we do not yet understand why the prevalence of MSPs is increasing and why there exist MSPs in some industries, but not (yet?) in others (Gawer and Cusumano, 2014). This is particularly surprising as MSPs may offer promising entrepreneurial opportunities. Positive indirect network effects not only trigger virtuous feedback loops that create monopolies (van Alstyne et al., 2016), they also imply high barriers to entry once an MSP has successfully been established (Eisenmann et al., 2006). Monopoly outcomes furthermore imply that MSPs have high buyer power and hence pose a serious threat to the margins of incumbent firms that are not orchestrating their own MSPs (Porter, 2008). As MSPs are such a relevant phenomenon for both entrepreneurs and incumbent firms this study aims to answer the question: Which contextual factors influence, i.e. aid or hold back, the emergence of MSPs?

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