Value Creation and Value Appropriation in Multi-Sided Markets: Strategic Mechanisms and Platform Dynamics
Keywords:
Multi-sided platform, Network effects, Value co-creation; Value appropriation, Digital ecosystems, Platform strategy, Competitive advantage, Platform governanceAbstract
The global economic logic has been reworked around the multi-sided platform (MSP), shifting focus from the “pipeline” of production to the orchestration of networked resource integrators. This conceptual research examines value co-creation and value appropriation in digital ecosystems and the strategic mechanisms that enable platform sustainability and dominance. Industrial organisation, strategic management, and information systems provide multi-disciplinary perspectives on how value is generated by network effects (direct and indirect) and by modular technological architectures that give third-party innovators access to boundary resources such as APIs. Value appropriation has shifted from transactional commissions to architecture-mediated appropriation, including data extractivism and algorithmic control, through which platform sponsors harvest “learning rents” from collective data that individual participants cannot recreate. The study investigates platform dynamics across the lifecycle and identifies a recursive coevolution as go-to-market narratives shift from “platform as supportive market builder” to “platform as selective and redistributive”. A critical balance exists between maximising engagement and maintaining long-term ecosystem health. The results provide guidelines for managers addressing the “quantity-quality” and “chicken-and-egg” paradoxes intrinsic to emergent ecosystems. Finally, the ethical implications of platform power are outlined, and a research agenda is proposed for SME resilience and the disruptive potential of decentralised technologies.
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