Platform governance and complementors’ performance: Evidence from the crowdfunding market

Abstract

In this paper, I investigate the combination of three platform governance mechanisms. I show how openness - which will potentially lead to higher complementor competition, and a greater share of low quality complementors – can be balanced with other governance mechanisms – mainly mechanisms that incentivize the production of high quality complements. More specifically, I focus on the provision of information to complementors and certification as mechanisms that can compensate for the arguably lower pool of complementors on the platform, helping consumers to choose high quality complementors while potentially allowing more innovation to emerge. I test my hypotheses in the context of a Brazilian crowdfunding platform (Catarse), which unexpectedly changed its one governance mechanism in 2016. The results provide support to my hypotheses.