Platform Governance Design in Platform Ecosystems: Implications for Complementors’ Multihoming Decision

“This systematic effect of entry sequence on the rate of multihoming could be tackled by either a Heckman’s two-stage model correcting for selection biases (Heckman, 1979) or an endogenous treatment-effects model correcting for endogenous entry (Rietveld, 2018).”

“In doing so, platform architecture affords ecosystems sufficient flexibility without involving overt managerial fiat or explicit coordination from an ecosystem leader (Jacobides et al., 2018).”

“20 observation period, can also be accommodated (Allison, 1984).”

“Following Adner and Kapoor (2010), we direct attention to modular component providers that are part of a platform ecosystem.”

“The multilateral interdependent relationships among different groups of producers could be a source of frictions in collaborative production (Adner, 2017) to which platform research has paid limited attention (with exceptions, such as Hagiu, 2014; Simcoe & Watson, 2019).”

“Greater structural interdependence also implies increased accompanying design changes in response to ongoing changes in various interfaces (Sanchez & Mahoney, 1996; Schilling, 2000).”

“Taking up recent calls for greater research attention to complementors (McIntyre & Srinivasan, 2017; Yoo et al., 2012), this study investigates the inhibiting and facilitating factors for complementor multihoming in the context of platform ecosystems.”

“The functionality of a platform can be extended by third-party innovators that leverage the platform’s standardized interface upon which they can create their own, complementary products (Gawer & Cusumano, 2014).”

“Greater structural interdependence also implies increased accompanying design changes in response to ongoing changes in various interfaces (Sanchez & Mahoney, 1996; Schilling, 2000).”

“Taking inspirations from the exploitation/exploration literature (Lavie & Rosenkopf, 2006; Stettner & Lavie, 2014), we code business model as 1.5 for apps that charge a higher-than-average price for download and if in-app purchase revenue / total revenue > advertising revenue/total revenue; 1 for…”

“The cloglog model is a discrete-time implementation of the Cox proportional hazard model that 641Chen et al. / Complementor Multihoming in Platform Ecosystems assumes continuous failure times (Prentice & Gloeckler, 1978).”

“Taking up recent calls for greater research attention to complementors (McIntyre & Srinivasan, 2017; Yoo et al., 2012), this study investigates the inhibiting and facilitating factors for complementor multihoming in the context of platform ecosystems.”

“651Chen et al. / Complementor Multihoming in Platform Ecosystems configuration of interdependent parties (Santos & Eisenhardt, 2005).”

“An open governance design implies the devolution of decision rights from platform owners (Boudreau, 2010).”

“Decentralizing control of the interface could undermine the stability of standardized assets and raise ecosystem complexity (Baldwin & Woodard, 2009).”

“A closed design, by contrast, allows the platform owner to retain proprietary control by limiting other parties’ decision rights to the platform (Schilling, 2009; West, 2003).”

“Given previous research on platform competition (Cennamo & Santaló, 2013), we purposely choose a nongame category, where it is relatively rare to use exclusivity contracts, which prevent an app from multihoming for an extended period of time.”

“Volatility is computed as follows (Bourgeois, 1985; Kochhar & Hitt, 1998): Volatility days of a month m = −( ) =∑ X X X j j 2 1 , where i = platform-level characteristics (in our study, we use the number of downloads of the daily top 20 downloaded apps), j = days in a month (1~28/30/31), Xj = ij+1…”

“Platform research to date emphasizes how platform governance can prompt positive externalities (or indirect network effects) between producers and consumers (Boudreau, 2012; Cennamo & Santaló, 2013; Zhu & Iansiti, 2012).”

“Platform research to date emphasizes how platform governance can prompt positive externalities (or indirect network effects) between producers and consumers (Boudreau, 2012; Cennamo & Santaló, 2013; Zhu & Iansiti, 2012).”

“Current research on platform governance primarily concerns the direct access granted to complementors and the platform owner’s role as a self-interested orchestrator in regulating complementors (Eaton et al., 2015; Parker & Van Alstyne, 2018; Rietveld, Ploog & Nieborg, 2020).”

“Greater decision rights will translate into more autonomy to thirdparty producers that adopt the platform (Eisenmann et al., 2009; Wareham, Fox & Cano Giner, 2014).”

“While there is a trade-off between market reach and financial success given the varied positioning of the platforms (Cennamo, 2019), both present equally appealing opportunities to app developers (Bresnahan”

“Much of this literature focuses on platform governance, that is, how platform owners utilize rules, constraints, and inducements to address market failures and enable interactions (Boudreau & Hagiu, 2009; Zhang, Li, & Tong, 2020).”

“Taking inspirations from the exploitation/exploration literature (Lavie & Rosenkopf, 2006; Stettner & Lavie, 2014), we code business model as 1.5 for apps that charge a higher-than-average price for download and if in-app purchase revenue / total revenue > advertising revenue/total revenue; 1 for…”

“While an open design is desirable from a platform owner’s perspective, it may lead to unintended frictions between different ecosystem participants, a situation characterized by ecosystem complexity (Kapoor & Agarwal, 2017).”

“Previous research shows that app size is reflective of coding efforts and development cost (Ghose & Han, 2014), and the number of SDKs indicates the extent to which complementors utilize modular components.”

“That sheds light on the key organizational challenge for platform owners to balance variety with ecosystem complexity (Cennamo & Santaló, 2019).”

“In this study, we view a platform’s governance design through the partitioning of decision rights between the platform owner and ecosystem participants to access, augment, or distribute the platform technology (Chen et al., 2020; Karhu, Gustafsson, & Lyytinen, 2018; Tiwana, 2014).”

“That results in a diverse range of sizes, features, and capabilities among Android handsets and, most importantly, many differentiated, nonstandardized versions of Android operating system (Karhu et al., 2018).”

“Developers may use the first platform to test the market and later leverage the success by outbound multihoming (Cennamo et al., 2018).”

“SDK is the collection of technical modules for app development available on an ecosystem’s central technology platform (Tiwana, 2014).”

“Unlike traditional transaction costs, coordination frictions in an ecosystem are too complex to decompose into a collection of independent, dyadic interactions (Davis, 2016).”

“In other words, part of the technical and product development capability that complementors deploy to overcome complexity problems lies outside of their organizational boundaries (Jacobides & Hitt, 2005).”

“To create more value, SDK providers tend to offer cross-platform components that allow an app to perform the same function in multiple platform ecosystems at a minimal marginal cost (Corts & Lederman, 2009; Ozalp et al., 2018).”

“…emphasizes platform owners’ governing of the complementors (Eaton, Elaluf-Calderwood, Sorensen, & Yoo, 2015; Rietveld, Schilling, & Bellavitis, 2018), while much less is known about the behaviors and challenges of complementors (Agarwal & Kapoor, 2019; Rietveld & Eggers, 2018; Zhang et al., 2020).”

“Researchers maintain that more outbound multihoming weakens the platform’s differentiation and more inbound multihoming reduces users’ switching cost to a rival platform ecosystem (Landsman & Stremersch, 2011).”

“, smartphone producers) to manage the interface through which users consume complements (e.g., as is the case of Android; Eisenmann, 2008; Eisenmann, Parker, & Van Alstyne, 2009), it also breeds a more complex ecosystem, relative to rival platform ecosystems (e.”

“Platforms coordinate autonomous innovators by standardized interfaces instead of hierarchy or market, such that a vast number of external actors can join the platform ecosystem and create complementary products for platform users (Cennamo, 2018).”

“This systematic effect of entry sequence on the rate of multihoming could be tackled by either a Heckman’s two-stage model correcting for selection biases (Heckman, 1979) or an endogenous treatment effects model correcting for endogenous entry (Rietveld, 2018).”

“Moreover, in digital innovations, user participation constitutes an important channel of knowledge acquisition and alleviates the cost of feasibility test in product development (Ye & Kankanhalli, 2018).”

“Since our data are analyzed on a monthly basis, we employ a complementary log-log (cloglog) transformation (Tsoukas, 2011).”

“Without such knowledge, complementors can still leverage the capability of cospecialized parties in product design, production, and delivery (Thomas et al., 2014).”

“A closed design, by contrast, allows the platform owner to retain proprietary control by limiting other parties’ decision rights to the platform (Schilling, 2009; West, 2003).”

“Intrafirm learning can occur in platform owners, which helps them respond to new market situations positively (Seamans & Zhu, 2017).”

“4 While there is a trade-off between market reach and financial success given the varied positioning of the platforms (Cennamo, 2019), both present equally appealing opportunities to app developers (Bresnahan et al., 2015).”

“As modularity curtails the impact of ecosystem complexity, it also helps prevent market tipping (Simcoe & Watson, 2019).”

“Since affiliation with multiple platforms may pose challenges regarding resource allocation (Chen et al., 2020), we further controlled for the impact of multihoming, a dummy variable indicating whether an app is”