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When "more" is not better

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Author Info

  • CARMELO CENNAMO

    ()
    (Instituto de Empresa)

  • JUAN SANTALO

    ()
    (Instituto de Empresa)

Abstract

This article examines the value-creation capacity of intra-platform competition (IPC) and exclusivity; two main strategies platforms use to incentivize, accumulate and extract rent from complementary content resources - complementors. Building on the concept of ´resource functionality´ we show that, for enhanced levels of IPC, exclusive complementors have limited functional value and rareness, failing to bring differentiation capacity to the platform´s system. Also, in line with the logic of ´capability equivalence´, we show that platform´s differentiation in terms of the composition of complementors´ portfolio has a U-shaped relationship with platform performance.

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File URL: http://latienda.ie.edu/working_papers_economia/WP09-06.pdf
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Bibliographic Info

Paper provided by Instituto de Empresa, Area of Economic Environment in its series Working Papers Economia with number wp09-06.

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Length: 43 pages
Date of creation: Jul 2009
Date of revision:
Handle: RePEc:emp:wpaper:wp09-06

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Related research

Keywords: Complementary resources; Intra-platform competition; Platform markets; Resource functionatility; Multi-sided markets;

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