The challenge of governing digital platform ecosystems

Abstract

Multi-sided platforms (MSPs) continue to disrupt long-established industries. Therefore, there is a growing popularity to scientifically examine how and why those platforms become more and more economically important. The centerpiece to orchestrate the interaction between the involved parties is the platform governance. While past studies concentrated on describing and identifying those mechanisms, this article aims to provide more detailed knowledge of the practical implications of implementing platform mechanisms differently. With this goal in mind, the article conducted a literature review to identify important platform governance mechanisms. Building on that, a multiple case analysis was carried out examining seven successful MSPs and how they governed their platform. The results indicate that platform governance mechanisms are incorporated in different shapes and characteristics. The governance structure, for example, ranged from a very centralistic and autocratic organization to a more split approach with empowerment on the user side. Also, the accessibility varies from a high degree of openness to detailed background checks users need to pass in order to participate in the platform. Out of these findings, different tradeoffs can be derived. A high degree of openness, for example, goes along with a greater quantity of products or services, but lacks in quality and indicates a higher perceived risk. Overall this article shows the practical implications and characteristics of different platform governance characteristics and helps practitioners and scientists to learn from successful MSPs.