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Structural Analysis of Value Creation in Software Service Platforms

Listed author(s):
  • Netsanet Haile

    ()

    (College of Engineering, Seoul National University)

  • Jorn Altmann

    ()

    (College of Engineering, Seoul National University)

As software service platforms grow in number of users and variety of service offerings, it raises the question of how this phenomenon impacts the value obtained by users. This paper identifies system usability, service variety, and personal connectivity to be the major determinants that contribute to the value offered to users on mobile software service platforms. A structural equation model, which is based on utility theory, technology acceptance theory, and the theory of network externalities, has been constructed from seven observed constructs, reflecting the three determinants and the user value. The lower bound of user value is estimated through the user’s willingness-to-pay for services and the user’s willingness to spend time on using services. For the validation, a co-variance-based structural equation analysis has been conducted on online survey data of 210 users of mobile service platforms (e.g., Android, iOS). The results show that the number of services used and the number of active user connections were found to be the strongest constructs explaining user value. Perceived usefulness did not explain user value as much. In total, they can explain 49% of the value that the user receives from the platform. The implication of this result is that users’ value from a software service platform cannot be explained by the technology acceptance model itself. Instead, an approach that as used in this research of integrating network externality theory, utility theory, and technology acceptance theory is necessary.

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File URL: ftp://147.46.237.98/DP-127.pdf
File Function: First version, 2015
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Paper provided by Seoul National University; Technology Management, Economics, and Policy Program (TEMEP) in its series TEMEP Discussion Papers with number 2015127.

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Length: 31 pages
Date of creation: Nov 2015
Date of revision: Nov 2015
Publication status: Published in Electronic Markets, The International Journal on Networked Business, Springer.
Handle: RePEc:snv:dp2009:2015127
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