Motivating Third-Party Providers to Avoid Cross-Side Conflicts: A Random Field Experiment from the Perspective of Value Co-creation and Appropriation in Platform Governance

Posted: 25 Aug 2020

See all articles by Ling Xue

Ling Xue

Georgia State University

Peijian Song

Nanjing University

Lanfei Shi

University of Virginia - McIntire School of Commerce

Xia Zhao

University of Georgia

Fan Feng

Nanjing University

Date Written: May 1, 2020

Abstract

Platforms strive to resolve cross-side conflicts between different sides, i.e., providers and customers, caused by market frictions. While provider-side undesirable behaviors (e.g., misinformation and delayed communication) have been recognized as main cause of cross-side conflicts, how platforms can effectively motivate providers on platforms to exert best effort to reduce cross-side conflicts has been under-investigated. This study aims to develop solutions that motivate the providers to proactively reduce such cross-side conflicts. Following the platform governance theories, we consider two important components of value-based governance—value co-creation and value appropriation. We collaborate with a peer-to-peer rental platform in China to design and conduct a field experiment in which third-party providers (i.e., hosts in this context) receive the messages regarding the platform’s value co-creation perspectives (i.e., provider-emphasized vs. customer-emphasized) and value appropriation mechanisms (i.e., competition-based vs. cooperation-based). The results show that compared to the control message with no value-based statement, messages with customer-emphasized value co-creation statements can effectively motivate providers to reduce customers’ complaints, whereas provider-emphasized value co-creation statements lead to more such cross-side conflicts. Moreover, value appropriation statements play a significant moderating role in the impact of value co-creation statements. The providers’ granular behaviors are further explored to gain insights on the observed effects. The findings provide actionable implications for platforms on designing effective governance mechanisms.

Keywords: Value co-creation, value appropriation, platform governance, value-based governance, cross-sided conflicts, digital platform

Suggested Citation

Xue, Ling and Song, Peijian and Shi, Lanfei and Zhao, Xia and Feng, Fan, Motivating Third-Party Providers to Avoid Cross-Side Conflicts: A Random Field Experiment from the Perspective of Value Co-creation and Appropriation in Platform Governance (May 1, 2020). Available at SSRN: https://ssrn.com/abstract=3650242

Ling Xue (Contact Author)

Georgia State University ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

Peijian Song

Nanjing University ( email )

No. 22 Hankou Road
Nanjing, Jiangsu 210093
China

Lanfei Shi

University of Virginia - McIntire School of Commerce ( email )

125 Ruppel Dr
Charlottesville, VA 22904-4173
United States

Xia Zhao

University of Georgia ( email )

610 S. Lumpkin St.
Benson C404
Athens, GA 30602
United States

Fan Feng

Nanjing University ( email )

Nanjing, Jiangsu 210093
China

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