Growing Platforms by Adding Complementors Without a Contract
Authors: Mayya, Raveesh; Li, Zhuoxin
Journal: Information Systems Research (2025)
<jats:p> Practitioner-Oriented Abstract </jats:p><jats:p> Online platforms often face challenges in sustaining growth, especially in competitive markets such as food delivery. This paper examines a novel strategy in which platforms list nonpartnered restaurants, allowing consumers to order from them via third-party deliverers. Whereas these restaurants gain visibility without paying commissions, concerns arise about potential harm because of lack of control over menus and pricing. </jats:p><jats:p> We analyze the impact of this strategy using data from Grubhub and a California policy change that banned nonpartnered listings. We find that being listed as nonpartnered boosts takeout revenue for these restaurants, particularly independent ones. Additionally, there’s a positive spillover effect on partnered restaurants. However, regulatory delisting reverses these gains, highlighting the delicate balance between platform growth strategies and regulatory actions. </jats:p><jats:p> For platform owners, this study underscores the potential of noncontracted partnerships as a growth strategy, especially if there are third-party enablers on the platform such as deliverers. However, it also…