Under Review
Competing with the Platform: Complementor Positioning and Cross-Platform Response to Entry
- Conditional Accept at Strategic Management Journal
- Presented at SMS, AOM, DRUID, and BU Platform Conferences.
- with Prof. Aldona Kapacinskaite (Bocconi)
Abstract:
This study examines complementor response to competition with the platform owner. We account for the existence of complementors’ outside option of repositioning to a competing platform, and we argue that generalists experience low repositioning cost and are more likely to shift effort to a competing platform, while specialists focus on the focal platform. We examine Apple’s “Files” app entry and find support for our hypotheses. Contrasting Apple’s entry with that of other non-platform large firms, we find that only the platform owner elicits a strong complementor response, highlighting unique characteristics of platform owner as competitor. This paper contributes to the competitive and corporate strategy literatures, underscoring how complementor heterogeneity affects cross-platform allocation of effort when the platform owner becomes a competitor in complementor spaces.
Keywords:
platform entry; complementor heterogeneity; specialist and generalist firms; repositioning cost; multihoming
Myopic Expansions on Platforms: Evidence From Mobile Application Markets
- R&R at Administrative Science Quarterly
- Presented at SMS, DRUID, and Strategy Science Conferences
- with Prof. Keyvan Vakili (LBS) and Prof. Aldona Kapacinskaite (Bocconi)
Abstract:
The literature on market design and multisided platforms focuses primarily on the positive impact of resolving market frictions on the aggregate market size and efficiency. In this paper, we argue that extensive resolution of market frictions associated with market entry on multisided platforms can nudge platform participants to overlook the heterogeneous nature of different markets and, consequently, to engage in large-scale, myopic market expansions. These expansions, in turn, can lead to lower customer satisfaction and performance. We test our arguments in the context of Apple’s App Store. We find that app developers’ large-scale market expansions increase their client base in the short run but negatively affect their ratings, downloads, financial performance, and innovation rate in the longer run.
Keywords:
platform strategy; multisided platforms, market entry; market frictions; market design, mobile apps; complementor performance