IDEAS home Printed from https://ideas.repec.org/a/eee/bushor/v65y2022i3p277-289.html
   My bibliography  Save this article

The Achilles’ heel of the platform business model: Disintermediation

Author

Listed:
  • Ladd, Ted

Abstract

Multisided marketplaces have become fixtures in many contemporary industries. From Amazon to Google, platforms dominate entire markets and have become some of the world’s most valuable companies. Despite their success, these companies have a subtle but potentially fatal weakness: disintermediation. This occurs when buyers and sellers find each other on the platform and then bypass that very platform—and its commission—to complete their transaction directly, off of the platform. This article compiles and illustrates the causes of and remediations to platform disintermediation.

Suggested Citation

  • Ladd, Ted, 2022. "The Achilles’ heel of the platform business model: Disintermediation," Business Horizons, Elsevier, vol. 65(3), pages 277-289.
    • Handle: RePEc:eee:bushor:v:65:y:2022:i:3:p:277-289
    DOI: 10.1016/j.bushor.2021.02.049
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0007681321000689
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.bushor.2021.02.049?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    2. Thierer, Adam & Koopman, Chris & Hobson, Anne & Kuiper, Chris, 2015. "How the Internet, the Sharing Economy, and Reputational Feedback Mechanisms Solve the “Lemons Problemâ€," Working Papers 07371, George Mason University, Mercatus Center.
    3. Hagiu, Andrei & Wright, Julian, 2015. "Multi-sided platforms," International Journal of Industrial Organization, Elsevier, vol. 43(C), pages 162-174.
    4. Mark Granovetter, 2005. "The Impact of Social Structure on Economic Outcomes," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 33-50, Winter.
    5. Chris Nosko & Steven Tadelis, 2015. "The Limits of Reputation in Platform Markets: An Empirical Analysis and Field Experiment," NBER Working Papers 20830, National Bureau of Economic Research, Inc.
    6. Grace Gu & Feng Zhu, 2018. "Trust and Disintermediation: Evidence from an Online Freelance Marketplace," Harvard Business School Working Papers 18-103, Harvard Business School.
    7. Geoffrey G. Parker & Marshall W. Van Alstyne, 2005. "Two-Sided Network Effects: A Theory of Information Product Design," Management Science, INFORMS, vol. 51(10), pages 1494-1504, October.
    8. Benjamin Edelman & Julian Wright, 2015. "Price Coherence and Excessive Intermediation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(3), pages 1283-1328.
    9. Benoit, Sabine & Baker, Thomas L. & Bolton, Ruth N. & Gruber, Thorsten & Kandampully, Jay, 2017. "A triadic framework for collaborative consumption (CC): Motives, activities and resources & capabilities of actors," Journal of Business Research, Elsevier, vol. 79(C), pages 219-227.
    10. Christian Peukert & Imke Reimers, 2018. "Digital Disintermediation and Efficiency in the Market for Ideas," CESifo Working Paper Series 6880, CESifo.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ioana CÎMPAN & Emil Lucian CRISAN & Irina Iulia SALANTA & Alin Adrian MIHAILA, 2022. "Digital Platforms Business Models," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 23(5), pages 612-629, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Grace Gu & Feng Zhu, 2018. "Trust and Disintermediation: Evidence from an Online Freelance Marketplace," Harvard Business School Working Papers 18-103, Harvard Business School.
    2. Rangaswamy, Arvind & Moch, Nicole & Felten, Claudio & van Bruggen, Gerrit & Wieringa, Jaap E. & Wirtz, Jochen, 2020. "The Role of Marketing in Digital Business Platforms," Journal of Interactive Marketing, Elsevier, vol. 51(C), pages 72-90.
    3. Grace Gu & Feng Zhu, 2021. "Trust and Disintermediation: Evidence from an Online Freelance Marketplace," Management Science, INFORMS, vol. 67(2), pages 794-807, February.
    4. Feng Zhu & Qihong Liu, 2018. "Competing with complementors: An empirical look at Amazon.com," Strategic Management Journal, Wiley Blackwell, vol. 39(10), pages 2618-2642, October.
    5. Elert, Niklas & Henrekson, Magnus, 2017. "Entrepreneurship and Institutions: A Bidirectional Relationship," Working Paper Series 1153, Research Institute of Industrial Economics, revised 05 May 2017.
    6. Wei Zhou & Zidong Wang, 2020. "Competing for Search Traffic in Query Markets: Entry Strategy, Platform Design, and Entrepreneurship," Working Papers 20-12, NET Institute.
    7. Christian Stummer & Dennis Kundisch & Reinhold Decker, 2018. "Platform Launch Strategies," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 60(2), pages 167-173, April.
    8. Ethem Ilbiz & Christian Kaunert, 2022. "Sharing Economy for Tackling Crypto-Laundering: The Europol Associated ‘Global Conference on Criminal Finances and Cryptocurrencies’," Sustainability, MDPI, vol. 14(11), pages 1-15, May.
    9. Cristiano Codagnone & Federico Biagi & Fabienne Abadie, 2016. "The Passions and the Interests: Unpacking the ‘Sharing Economy’," JRC Research Reports JRC101279, Joint Research Centre.
    10. Massimo G. Colombo & Massimiliano Guerini & Cristina Rossi-Lamastra & Andrea Bonaccorsi, 2022. "The “first match” between high-tech entrepreneurial ventures and universities: the role of founders’ social ties," The Journal of Technology Transfer, Springer, vol. 47(1), pages 270-306, February.
    11. Xing Wan & Javier Cenamor & Geoffrey Parker & Marshall Van Alstyne, 2017. "Unraveling Platform Strategies: A Review from an Organizational Ambidexterity Perspective," Sustainability, MDPI, vol. 9(5), pages 1-18, May.
    12. Casner, Ben, 2020. "Seller curation in platforms," International Journal of Industrial Organization, Elsevier, vol. 72(C).
    13. Garcia-Swartz, Daniel D. & Garcia-Vicente, Florencia, 2015. "Network effects on the iPhone platform: An empirical examination," Telecommunications Policy, Elsevier, vol. 39(10), pages 877-895.
    14. Lei Huang & Yandong Zhao & Liang Mei & Peiyi Wu & Zhihua Zhao & Yijun Mao, 2019. "Structural Holes in the Multi-Sided Market: A Market Allocation Structure Analysis of China’s Car-Hailing Platform in the Context of Open Innovation," Sustainability, MDPI, vol. 11(20), pages 1-20, October.
    15. Hildebrandt, Christian & Arnold, René, 2018. "Marktbeobachtung in der digitalen Wirtschaft – Ein Modell zur Analyse von Online-Plattformen," WIK Discussion Papers 427, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    16. Tünde Zita Kovács & Forest David & Adrián Nagy & István Szűcs & András Nábrádi, 2021. "An Analysis of the Demand-Side, Platform-Based Collaborative Economy: Creation of a Clear Classification Taxonomy," Sustainability, MDPI, vol. 13(5), pages 1-20, March.
    17. Zeng, Jing & Khan, Zaheer & De Silva, Muthu, 2019. "The emergence of multi-sided platform MNEs: Internalization theory and networks," International Business Review, Elsevier, vol. 28(6), pages 1-1.
    18. Alexander Theisen & Lynne Kiesling & Michael Munger, 2022. "From Airbnb to solar: electricity market platforms as local sharing economies," Public Choice, Springer, vol. 193(3), pages 141-162, December.
    19. Alberto Bracci & Jorn Boehnke & Abeer ElBahrawy & Nicola Perra & Alexander Teytelboym & Andrea Baronchelli, 2021. "Macroscopic properties of buyer-seller networks in online marketplaces," Papers 2112.09065, arXiv.org, revised Apr 2022.
    20. Shi, Xianwei & Liang, Xingkun & Luo, Yining, 2023. "Unpacking the intellectual structure of ecosystem research in innovation studies," Research Policy, Elsevier, vol. 52(6).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:bushor:v:65:y:2022:i:3:p:277-289. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/bushor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.