Platform Ecosystems: Exploring Participation and Performance

Platforms are often seen as the most influential organizational form of our time. Harnessing the strengths of external parties allows for unprecedented innovation (e.g., Facebook, iOS). Platforms aggregate and match participants in fragmented markets (e.g., Craigslist, Marktplaats, Airbnb). As such, platforms often become the epicenters of industries and have often replaced incumbents. What leads to market power and growth of platforms? Understanding this is important if we want to create platforms where they are beneficial to the economy and society and counteract or regulate them where they are harmful. This dissertation investigates how platform participation and platform performance are related to each other. Participation refers to installing and using a technology. From the economics perspective, performance includes mostly financial indicators such as revenues or profit. However, it can also concern other indicators, for instance, the participation of complementors or users. Under network effects, current participation increases the platform’s value to future users, which is closely linked to performance. This dissertation consists of four chapters that together address the main research question. It draws on evolutionary economics, platform economics, and strategic management. It consists of conceptual (Chapters 2, 5, and parts of Chapter 3) and empirical studies (Chapters 3 and 4).