Platform Papers 2022 Year in Review

It was another strong year for academic research on platform competition

In this post I take stock of the academic research on platform competition published in 2022. Using Platform Papers data, I look at the volume of research published across academic subdomains and how it compares to prior years. I further look at some of the themes covered by this research and how it maps on to developments in ‘the real world’. Finally, I briefly look ahead to 2023.

A look at the numbers

In 2022, a record number of 100 papers were added to the Platform Papers references dashboard, up from 93 papers in 2021.[1] The breakdown across academic subdomains is as follows:

• Management & Organizations: 39 papers

• Information Systems: 24 papers

• Marketing: 21 papers

• Economics: 16 papers

The share of papers published in marketing journals this year stands out. While the disciplinary subsamples are fairly small and therefore volatile, it does seem that marketing scholars are increasingly interested in platform competition research: Whereas in 2018 papers published in marketing journals accounted for less than 3% of all papers added to the database, in 2022 this was 21%.

Management Science was by far the most prevalent outlet with 22 platform papers published in 2022 (of these, 13 were published in marketing departments). Other popular journals include Information Systems Research (12 papers) and the Strategic Management Journal (11 papers).

A look at the content

Thematically, there is a pretty even split between research covering issues related to ecosystem governance and orchestration (35 papers), research studying network effects, winner-take-all dynamics, and pricing (31 papers), and research addressing heterogeneity within and between platforms (31 papers). Corporate scope (e.g., platforms vertically integrating into the complementor space) received considerably less attention this year with 17 published papers.[2]

Below I list five papers that got published in 2022 that I am particularly excited about:

1. Fending Off Critics of Platform Power with Differential Revenue Sharing: Doing Well by Doing Good? (Bhargava, Wang & Zhang; Management Science). I like this paper because it ties into the ongoing discussion about whether and how to regulate dominant platforms. The authors look at a very specific but oft-debated policy: dominant platforms changing their revenue sharing structure to be more favorable to smaller, less successful sellers. The economic model suggests that such a policy change not only benefits small sellers on the platform, but also larger sellers, and ultimately the platform itself. As the authors note: “Hence, an intervention that ostensibly offers concessions and generous treatment to producers might well be self-serving for platforms and good for the entire ecosystem.”

2. From proprietary to collective governance: How do platform participation strategies evolve? (O’Mahony & Karp; Strategic Management Journal). This paper tracks how a platform’s governance evolves over time and how it affects user participation on the platform. It’s another important contribution to illustrate that governance is highly dynamic and strategic. Platforms that open up attract higher participation rates, but participation by users declines when the platform’s framework of rules becomes unclear. (Twitter, anyone?!)

3. Positive Demand Spillover of Popular App Adoption: Implications for Platform Owners’ Management of Complements (Lee et al.; Information Systems Research). Traditional frameworks for analyzing competition do not unequivocally apply to platforms. Whereas competition from successful market participants can be detrimental in traditional markets, this paper finds strong empirical support for positive spill-over effects. Popular apps increase the adoption and usage of non-popular apps on the platform. These effects apply to apps released prior to the launch of the popular app as well as those released after.

4. Local Network Effects in the Adoption of a Digital Platform (Kim et al.; The Journal of Industrial Economics). Not all network effects are created equal and managers and academics are increasingly coming to grips with this. Studying the fantasy sports markets, this paper finds that “the size of a county’s existing user base on the platform significantly impacts the number of new adopters in that county, while the size of the user base in nearby counties does not.” In other words, participation by users that are more closely connected in the real world results in stronger network effects on the platform.

5. The Future of the Web? The Coordination and Early-Stage Growth of Decentralized Platforms (Hsieh & Vergne; Strategic Management Journal). This time last year some platform managers might have worried that decentralized platforms would soon put them out of work. The ‘Crypto Winter’ will have somewhat cooled those expectations, but decentralized governance of platforms certainly hasn’t gone away entirely either. This pioneering paper analyses 20 cryptocurrency platforms to better understand how decentralized platforms are governed. The authors document three distinct governance mechanisms: 1) algorithmic coordination, 2) social coordination, and 3) goal coordination.

I should note that these papers neatly map on to the Five Platform Competition Trends to Watch in 2022 that I identified at the beginning of the year when I started the Platform Papers Substack.

Speaking of which, I am grateful for all the scholars who have contributed their time and knowledge by translating their platform competition research papers into digestible blogposts. While I highly recommend going back and reading all of these excellent blogs (as well as subscribe to ensure you don’t miss out on any future blogs), here are the three most read blogposts from 2022:

1. Big Tech Platforms’ Entry into Healthcare and Education (by Özalp, Ozcan & Gawer). This blog describes the process of ‘digital colonization’ where firms like Apple and Google enter highly regulated markets such as health care and education by deploying various forms of data capture to generate data-driven insights, ultimately translating into new products and services, while being mindful of the highly regulated and sensitive nature of these industries.

2. Platform Envelopment and Network Effects (by Allen, Chandrasekaran & Gretz). This blog describes how envelopment—the strategy of absorbing the core functionality of another, often complementary platform—can help new platforms reduce their dependence on network effects and solve the chicken-and-egg problem. The main idea is that by absorbing an outside technology, firms can increase the standalone value of their own platform.

3. When Freemium Succeeds (by Rietveld). In this blog, I discuss how social product features such as multiplayer modes for video games, ridesharing functionality in ride-hailing apps, and virtual collaboration tools in productivity software can both help and harm a freemium product’s widespread adoption in its respective market. Social features can generate network effects, but they may fall flat if the addressable market for a product is insufficient.

Looking ahead

As regulation gets implemented and antitrust enforcement continues to target digital platforms, I am confident that 2023 will be another eventful year for platform competition research. My objective is to keep updating the references dashboard on a monthly basis and publish blogposts based on outstanding academic articles at similar intervals. I also hope to add some new functionality to the website and ensure it keeps running smoothly. Notably, I am part of the organizing team for the first summit of the European Digital Platform Research Network (EU-DPRN). This will be a two-day academic conference on digital platforms and ecosystems taking place on June 8 and 9th in Milan, Italy. The program will be accompanied by a one-day practitioner conference. More details to follow soon.

I hope you enjoy following Platform Papers and that you continue to do so in 2023. If you have any feedback or suggestions for improvements, feel free to reach out to me directly.

Happy New Year!