Special Section: Social Influence and Networked Business Interaction
Authors: Kauffman, Robert J.; Weber, Thomas A.
Journal: Journal of Management Information Systems (2019)
DOI: 10.1080/07421222.2019.1661086
Relationships between consumers and firms can no longer be analyzed in isolation. It has long been recognized that they are subject to important network externalities. Users care about the presence and opinions of other users, and similarly, firms interact strategically with other firms—be they competitors or complementors. Yet, due to the presence of intermediaries or public planners there are additional effects, beyond mere externalities, related to incentives, reputation, and network topology. For example, in sharing markets, there is a need for somebody to own the assets to be shared. And the incentives to own can be provided by the market price or explicit encouragement to participate by a self-interested(!) intermediary, at least in the short run. In the medical domain, where the true quality of a service is often difficult if not impossible to assess, a regulator—using mandatory disclosure protocols—can help provide informational feedback to consumers, which in turn should modulate their assessment of the service providers. The efficiency of such a publicly mandated closed information loop naturally depends on its implementation. Finally, consumers themselves may have intri…