Platform Owners Decide Which Offerings Become Stars, New Research Finds
— September 27, 2019
New study from faculty at UCL School of Management, NYU Stern School of Business and the University of Auckland Business School shows that sophisticated platform owners manipulate which products rise to the top of featured listings
Using data over a four-year period (2007-11) from seventh-generation video game consoles, UCL School of Management Professor Joost Rietveld, NYU Stern Professor Melissa Schilling and Auckland Business School Professor Cristiano Bellavitis examined ways that platform owners directed customer attention toward specific complements through endorsements, awards, prime positioning and recommender systems.
Key takeaways from the study include:
- Platform owners bring attention to underappreciated complements with high earnings potential and actively influence consumers’ perceptions of an ecosystem’s overall depth and breadth
- When a platform determines a need to strengthen its offerings in a particular category, it boosts complements in the grouping to build its presence and attract new customers
- Video games that ranked just below the category of “best-sellers” were 12.85% more likely to be promoted by the platform than those with top sales rankings
“The use of selective promotion is not limited to a specific platform or geographical region,” added Professor Schilling. “We’ve seen this trend develop on a global scale and across platforms, including gaming, search engines, music streaming, e-commerce, mobile apps and more.”
The paper, “Platform Strategy: Managing Ecosystem Value Through Selective Promotion of Complements,” was recently published by the Institute for Operations Research and Management Sciences.
Later today, Professor Schilling will debut the research publicly at NYU Stern’s inaugural Digital Innovation Conference, hosted by the NYU Stern Fubon Center for Technology, Business and Innovation.