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Balancing Variety and Quality: Examining the Impact of Benefit-Linked Cross-Subsidization on Multisided Platforms

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dc.contributor.authorTavalaei, Mahdi
dc.contributor.authorGawer, Annabelle
dc.contributor.authorSantaló, Juan
dc.contributor.rorhttps://ror.org/02jjdwm75
dc.date.accessioned2024-07-08T13:15:00Z
dc.date.available2024-07-08T13:15:00Z
dc.date.issued2024
dc.description.abstractMultisided platforms face a fundamental trade-off: should they ease entry for a larger number of providers of complementary products or services (complementors) to join the platform and benefit from cross-side network externalities,or should they limit entry to maintain complementors’ incentives to provide high-quality offerings? We contend that a specific cross-subsidizing pricing strategy – where the amount of subsidy to complementors is explicitly linked to the overall revenue they generate on the other side of the platform – may mitigate this trade-off. Using data from the airport industry,we demonstrate that following a reduction of airlines’ entry barriers,airports that subsidize airlines,based on the aforementioned scheme,can boost their financial performance and maintain traffic composition in favour of legacy airlines,which bring passengers who spend more in airport shops. Our findings shed light on how cross-subsidization may balance the variety and quality of complementors and their offerings on multisided platforms. © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd.
dc.description.keywordcross-subsidization pricing
dc.description.keywordgatekeeping strategies
dc.description.keywordmultisided platforms
dc.description.keywordnetwork externalities
dc.description.keywordvariety vs. quality trade-off
dc.formatapplication/pdf
dc.identifier.citationTavalaei, M. M., Santaló, J., & Gawer, A. (2024). Balancing Variety and Quality: Examining the Impact of Benefit?Linked Cross?Subsidization on Multisided Platforms. Journal of Management Studies.
dc.identifier.doihttps://doi.org/10.1111/joms.13120
dc.identifier.issn222380
dc.identifier.officialurlhttps://www.scopus.com/inward/record.uri?eid=2-s2.0-85196300238&doi=10.1111%2fjoms.13120&partnerID=40&md5=c727ba6195619029839f4e2f4a5f1cde
dc.identifier.urihttps://hdl.handle.net/20.500.14417/3120
dc.journal.titleJournal of Management Studies
dc.language.isoeng
dc.publisherJohn Wiley and Sons Inc
dc.relation.departmentStrategy
dc.relation.entityIE University
dc.relation.schoolIE Business School
dc.rightsAttribution-NonCommercial 4.0 International
dc.rights.accessRightsinfo:eu-repo/semantics/openAccess
dc.rights.urihttps://creativecommons.org/licenses/by-nc/4.0/
dc.subjectcross-subsidization pricing; gatekeeping strategies; multisided platforms; network externalities; variety vs. quality trade-off
dc.subject.keywordcross-subsidization pricing
dc.subject.keywordgatekeeping strategies
dc.subject.keywordmultisided platforms
dc.subject.keywordnetwork externalities
dc.subject.keywordvariety vs. quality trade-off
dc.titleBalancing Variety and Quality: Examining the Impact of Benefit-Linked Cross-Subsidization on Multisided Platforms
dc.typeinfo:eu-repo/semantics/article
dc.version.typeinfo:eu-repo/semantics/publishedVersion
dspace.entity.typePublication
person.identifier.scopus-author-id57208578234
person.identifier.scopus-author-id23996084500
person.identifier.scopus-author-id6506170616
relation.isAuthorOfPublicationb15ba486-b637-4a5f-ae06-6a5e367ce510
relation.isAuthorOfPublication.latestForDiscoveryb15ba486-b637-4a5f-ae06-6a5e367ce510
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