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Innovations are vital tasks for modern two-sided platforms to grow and avoid defunct. How these two-sided platforms innovate to impact platform performance remains virtually unexplored in literature. The purpose of this paper is to classify two types of platform innovations – same-side and cross-side – and to hypothesize that their performance is contingent on platform monetization type, growth rate and user acquisition and retention costs.

The authors collected news announcements of 177 same-side producer-to-producer (P-P), 216 same-side consumer-to-consumer (C-C) and 284 cross-side producer-to-consumer (P-C) innovations from 30 two-sided platforms and used event study and econometric techniques in data analysis.

The findings reveal that same-side innovations cannot sufficiently lead to an impact on platform performance, while cross-side innovations are always beneficial. Same-side P-P innovations can affect platform performance positively on consumer-monetized platforms, whereas same-side C-C innovations can only do so on producer-monetized platforms. Besides, when platforms grow rapidly (slowly), cross-side (same-side) innovations strengthen platform performance. On platforms that are subject to higher (lower) user acquisition and retention costs, only same-side (cross-side) innovations can enhance platform performance.

This study provides actionable insights for platform practitioners to implement proper strategies to manage same-side and cross-side innovations based on the three platform attributes of platform monetization type, growth rate and user acquisition and retention costs.

This study offers the first systematic and empirical investigation of two-sided platform innovations by classifying them as same-side innovations for building capability in managing users and cross-side innovations for establishing capability in managing exchange, which are the two core capabilities for two-sided platforms to avoid defunct. This study further provides a contingency framework that is unique to the two-sided platform setting to study the performance impact of these innovations.

In recent years, some peer-to-peer (P2P) service sharing platforms have improved their service quality by setting an entry quality threshold for service providers. Considering consumers' heterogeneous preferences for service quality and commission rate, it is worth studying how to select the commission rate contract for a P2P platform under a predetermined entry quality threshold for service providers.

In this study, the platform's profit-maximizing model is constructed under two proposed contracts: unilateral commission rate contract and bilateral commission rate contract. The optimal entry quality threshold and the optimal commission rate are obtained. This study also explores the impacts of cross-side network externality and service price on a platform's optimal decisions and social welfare.

Results show that it is always advantageous for the platform to adopt the bilateral commission rate contract, which is closely related to the strength of cross-side network externality, service price and quality sensitivity coefficient. Under certain conditions, adopting the unilateral commission rate contract can reduce platform profit and service provider surplus, and improve consumer surplus and social welfare.

This study analyzes the unilateral commission rate contract and the bilateral commission rate contract of the platform, and discusses which contract is beneficial to the platform, consumers and service providers. In addition, this study provides a basis for the operation decision of a P2P service sharing platform and the pricing decision of service providers.

Boundary decision is an important but underexplored theme in digital platform research. The boundary decision of digital platform enterprises (DPEs) differs from traditional organizations because of cross-side network effects (CNEs). This study intends to investigate whether transaction cost economics (TCE) and resource-based view (RBV), as classical organization boundary mechanisms, are still applicable for DPEs.

To unfold the research problem, this study conducts a fuzzy-set qualitative comparative analysis (fsQCA) on the samples of 21 platform business units.

The results show that the classical boundary decision theory still applies in the context of DPEs, but the cross-side network effects will affect boundary decision of DPEs.

This study provides a new framework – integrates TCE, RBV and CNEs – to analyze boundary decision of DPEs. This paper also contributes to research on both organization boundary decision and platform governance.

This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies.

This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.

Boundary decisions made by digital platform enterprises (DPEs) shape business performance and growth outcomes. Such operators can identify appropriate strategic approaches through a consideration of transaction costs, resource competence and cross-side networks effects (CNEs).

The briefing saves busy executives’ and researchers’ hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Although there is a growing research stream on Performance Measurement and Management Systems (PMMS) in Ecosystems literature, current research offers limited theoretical insights into how PMMS deal with two types of strategies in uncertain ecosystems: ecosystem-based strategy – EBS (at the focal firm level) and ecosystem strategy – ES (at the ecosystem level). This study aims at identifying how PMMS are employed to deal with different types of strategies in uncertain ecosystems.

The authors employed an inductive, rich multiple case approach in five focal firms with platform ecosystems. Data collection involved multiple sources of information (primary and secondary data), combing retrospective and longitudinal perspectives. Data analysis combined replication and comparison logic with coding.

This study identifies four major distinctive dimensions of Ecosystem PMMS under uncertainty: (1) Integrative Performance (considering the different ecosystem actors’ performance), (2) Interdependence Performance (mutual, yet not necessarily convergent amongst ecosystem partners), (3) Regulative Performance (paradoxical in nature, having to cope with both flexibility and stability) and finally (4) Phased Learning Performance (non-linear).

Our primary contribution is a new framework for PMMS literature: a performance measurement and management system for dealing with strategies in ecosystems. This framework enables managing performance regarding both types of strategies (EBS and ES) and their interplay in uncertain ecosystems.

The ecosystem management requires focal firms to measure and manage the overall ecosystem’s performance, and it varies according to the type of strategy adopted in each case. Our framework provides dimensions that guide firms to build and implement PMMS for an ecosystem consistent with the ES. Therefore, it may improve performance, especially in uncertain business contexts.

The findings enrich PMMS literature in an ecosystem context related to the ES in uncertain environments.

Considering the resource constraint, this paper aims to study how to make value-added service (VAS) investment strategy considering the negative intra-group network externality on the seller side from the perspective of a two-sided platform.

The authors use the dynamic game theory, optimization, sensitive analysis and numerical study in this research. The authors model their research question from the perspective of the dynamic game theory, and through optimizing the platform’s profit function, the equilibrium results in terms of VAS investing and pricing strategies are derived. To explore the characteristics of the optimal strategies, sensitive analysis is used, and numerical studies are conducted to further illustrate the analytical results.

It is found that the intra-group network externality is not necessarily the determinant for VAS investment strategy, and its overall negative impact can be overtaken by the investment in certain conditions. The optimal VAS investment level decreases in the negative intra-group network externality. Though the VAS investment is on the seller side, it has either positive or negative impact on the pricing for buyers. Moreover, for a stronger intra-group network externality among sellers, the two-sided prices could either increase or decrease.

The authors implicate how the intra-group network externality reduces the investment benefit and impacts the other side users. The limitation of considering the intra-group network externalities on only one side needs further extension.

The authors provide insights for platform operators in how to use recourse to improve users’ utility and how to price the two sides when competition exists on the seller side.

This study specifies the role of negative intra-group network externality in determining the investment and pricing strategy of a two-sided platform in addition to the positive inter-group network externality.

This chapter shows how the theory of industrial organization can help us understand some important aspects of crowdfunding that go beyond the finance sphere of the firm. A special attention is devoted to the role and behavior of crowdfunding platforms, which intermediate between entrepreneurs and contributors.

Mobile banking (M‐banking) involves the use of a mobile phone or another mobile device to undertake financial transactions linked to a client's account. M‐banking is one of the newest approaches to the provision of financial services through information communication technology (ICT), made possible by the widespread adoption of mobile phones even in low income countries. Emerging mobile banking (m‐banking platforms) in developing markets enable two sided markets, bringing together mobile handset users with other mobile users and commercial partners. It is the argument of this paper that the emergence of m‐banking platforms has the potential for spill‐over effects, and that these spill‐over effects will require regulatory authorities to develop appropriate policy responses.

This article derives from research on the m‐banking strategies of mobile network operators (MNOs) in developing markets, and the regulatory responses to these strategies. Field visits were made to the Philippines and Kenya where m‐banking platforms are well established, and in depth interviews took place with companies that had succeeded in launching m‐banking platforms, or were considering strategic responses in markets where competitors had launched platforms. Companies were identified from the existing body of literature, observation and personal contact. Additionally, data were collected from developing case studies.

M‐banking has the potential to bring basic banking and electronic transactions services to unbanked consumers in developing markets. But in enabling two‐sided markets, m‐banking solutions also provide specific questions for telecommunications industry regulators. Regulators need to question if the elements are in place for m‐banking networks to tip towards a single platform, especially in markets with dominant operators that hold significant market share.

Because of the multi‐homing costs inherent in most existing m‐banking platforms, these platforms introduce both economic and psychological switching costs for consumers. In turn, these switching costs can have the impact of reinforcing existing network effects in markets where the incumbent already holds significant market share for voice traffic. There are a number of options available to telecommunications regulators in responding to the emergence of m‐banking platforms, and authorities should take a measured approach to achieve optimal societal and industry outcomes.

This paper fulfils an important void in the current literature related to the growth of m‐banking platforms in emerging markets. While there has been an increasing body of literature examining the potential socio‐economic impact of m‐banking in developing markets, the purpose of this paper is to explore the implications of m‐banking for competitive dynamics between competing firms, and the related issues for regulatory authorities.

The purpose of this study is to identify how the value dynamics of the freemium business model (BM) play out in a social enterprise.

We draw on a multiple case study of two social enterprises –one nonprofit (Aravind Eyecare) in Asia and one for-profit in Latin America (Biodent)– to analyze the implications of applying the value architecture of a freemium BM to social enterprises.

The freemium BM departs from standard practice when applied in social enterprises. Meaningful differences include the feasibility/desirability of converting free users to paying ones, the presence of significant variable costs –which requires balancing the ratio of free and paying customers– and the use of nontraditional pricing schemes to enhance value capture. The social freemium BM can increase scalability, value creation and value capture. Under this model, “beneficiaries” can be more than passive recipients of value and contribute to a venture's success in various ways –such as lowering its operational costs or enhancing its value proposition toward third parties.

While in the past years commercial enterprises have been disrupted by the emergence of freemium platforms, the social enterprise field has barely taken notice. We extract lessons and implications from this paradigmatic change for the theory and practice of business model innovation in social enterprises, of particular relevance to Latin America, where social and environmental disequilibria remain a recurring feat.

Identificar cómo el modelo de negocio freemium impacta el desarrollo de un emprendimiento social.

realizamos un estudio de caso múltiple de dos emprendimientos sociales –uno sin fines de lucro (Aravind Eyecare) ubicada en Asia y el otro con fines de lucro ubicada en América Latina (Biodent)– para analizar las dinámicas qué genera el modelo de negocio freemium en la arquitectura de valor de los emprendimientos sociales.

Cuando el modelo freemium se aplica a un emprendimiento social, surgen diferencias respecto de la práctica estándar en empresas comerciales. Estas diferencias incluyen la viabilidad/conveniencia de convertir a los usuarios gratuitos en clientes de pago, la presencia de costos variables significativos –que imponen la necesidad de equilibrar la proporción de usuarios gratuitos y clientes de pago– y el uso de esquemas de precios no tradicionales para mejorar la captura de valor. El modelo freemium social puede contribuir a facilitar la escalabilidad, así como la creación y captura de valor de un emprendimiento social. Bajo este modelo, los “beneficiarios” pueden ser más qué receptores pasivos de valor y contribuir al éxito de la empresa de diversas formas –por ejemplo, reduciendo sus costos operativos o mejorando su propuesta de valor.

En las últimas dos décadas, varias industrias sufrieron grandes disrupciones por el surgimiento de modelos de negocio basados en plataformas, como el freemium. Sin embargo, hasta ahora el campo del emprendimiento social parecía no haber tomado nota de este cambio paradigmático. En este artículo, extraemos lecciones e implicaciones de este cambio para la teoría y la práctica de los emprendimientos sociales. Nuestros hallazgos son particularmente relevantes para América Latina, en donde subsisten profundos déficits socio-ambientales.

The purpose of this paper is to study the cooperation and pricing strategies for e-commerce platforms when considering seller classification.

E-commerce platforms serve to facilitate trade and generate revenue from the participants. By classifying the sellers in the market into two types (the individual sellers vs the professional sellers), the authors examine how the interaction between the two types of sellers affects the platform’s cooperation and pricing decisions. Specifically, the authors compare two cooperation strategies for the platform: cooperating only with the professional sellers (strategy I); and cooperating with both the two types of sellers (strategy II).

When the platform attractiveness for the professional sellers is high enough, strategy II is absolutely beneficial than strategy I; whereas when the platform attractiveness for the professional sellers is low and the performance requirement of the individual sellers is relatively high, strategy I will be more beneficial.

For a platform choosing strategy II, it should make effort to differentiate between the different types of sellers by the product or service quality.

The paper is among the first to study the cooperation and pricing strategies for the e-commerce platform with seller classification.