Competing with complementors
Subtitle: an empirical look at Amazon.com
By: Feng Zhu, Qihong Liu
Contributors: Liu, Qihong, author; Harvard Business School
Series: Working paper / Harvard Business School -- 15-044; Working paper (Harvard Business School) -- 15-044
Publisher: Harvard Business School
Published: 2014
Place of publication: Boston]
Language: eng
Number of pages: 29
Description: Platform owners sometimes enter complementors' product spaces to compete against them directly. Prior studies have offered two possible explanations for such entries: Platform owners may target the most successful complementors so as to appropriate value from their innovations, or they may target poor performing complementors to improve the platforms' overall quality. Using data from Amazon.com, we analyze the patterns of Amazon's entries into its third-party sellers' product spaces. We find evidence consistent with the former explanation: that the likelihood of Amazon's entry is positively correlated with the popularity and customer ratings of third-party sellers' products. Amazon's entry reduces the shipping costs of affected products and hence increases their demand. Results also show that third-party sellers affected by Amazon's entry appear to be discouraged from growing their businesses on the platform subsequently.
Notes: "December 2014" -- Publisher's website.

Includes bibliographical references (pages 22-25).