Citation: Proceedings of the 2019 Federated Conference on Computer Science and Information Systems, M. Ganzha, L. Maciaszek, M. Paprzycki (eds). ACSIS, Vol. 18, pages 535–538 (2019)
Abstract. Advanced information technologies have enabled the development of online marketplaces that connect businesses and people on a global scale. Much of the analysis of the adoption, growth and engagement on these marketplaces in the extant literature is based on the premise that they are characterized by network effects---a premise that has major implications for their deployment, implementation and management. In this paper we test this premise using data from Kiva, the world's largest online, peer-to-peer social lending marketplace. We find that while network effects are strong and significant during the early growth phase of the marketplace, they become weak or disappear once the marketplace stabilizes.
- H. Mendelson, “Platform business models: Text and case studies,” Electronic Business Case Collection, Kindle Edition, https://www.amazon.com/Platform-Business-Models-Electronic-Collection-ebook/dp/B078H3CDW9, 2017.
- M. L. Katz and C. Shapiro, “Systems competition and network effects,” Journal of economic perspectives, vol. 8, no. 2, pp. 93–115, 1994. http://dx.doi.org/10.1257/jep.8.2.93
- A. Hagiu and J. Wright, “Multi-sided platforms,” International Journal of Industrial Organization, vol. 43, pp. 162 – 174, 2015. http://dx.doi.org/https://doi.org/10.1016/j.ijindorg.2015.03.003. http://www.sciencedirect.com/science/article/pii/S0167718715000363
- J. Rohlfs, “A theory of interdependent demand for a communications service,” The Bell Journal of Economics and Management Science, pp. 16–37, 1974. http://dx.doi.org/10.2307/3003090
- E. Brynjolfsson and C. F. Kemerer, “Network externalities in microcomputer software: An econometric analysis of the spreadsheet market,” Management Science, vol. 42, no. 12, pp. 1627–1647, 1996. http://dx.doi.org/10.1287/mnsc.42.12.1627
- T. H. Hannan and J. M. McDowell, “The determinants of technology adoption: The case of the banking firm,” The RAND Journal of Economics, pp. 328–335, 1984. http://dx.doi.org/10.2307/2555441
- C.-P. Lin and A. Bhattacherjee, “Elucidating individual intention to use interactive information technologies: The role of network externalities,” International Journal of Electronic Commerce, vol. 13, no. 1, pp. 85–108, 2008. http://dx.doi.org/10.2753/JEC1086-4415130103
- ICE Benchmark Administration Limited (IBA), “Ice bofaml emerging markets corporate plus index effective yield [bamlemcbpiey],” 2019, retrieved from FRED, Federal Reserve Bank of St. Louis, https://fred.stlouisfed.org/series/BAMLEMCBPIEY.
- G. Madden, C.-N. Grant, and B. Dalzell, “A dynamic model of mobile telephony subscription incorporating a network effect,” Telecommunications Policy, pp. 133–144, 2004. http://dx.doi.org/10.1016/j.telpol.2003.12.002
- B. Lloyd and M. Surana, “Online marketplaces for loans are growing rapidly. should banks be worried?” https://www.hardingloevner.com/fundamental-thinking/online-marketplaces-for-loans-are-growing-rapidly-should-banks-be-worried/, accessed: 2019-05-07.
- Kiva Blog, “Expiring loans,” 2012, retrieved in May 2019 online from https://pages.kiva.org/blog/qa-expiring-loans-credit-limits-and-the-evolution-of-kiva.
- Kiva Blog, “Supply and demand,” 2014, retrieved in May 2019 online from http://blog.kiva.org/supply-and-demand#findingtrouble.
- M. Feldman, C. Papadimitriou, J. Chuang, and I. Stoica, “Free-riding and whitewashing in peer-to-peer systems,” IEEE Journal on selected areas in communications, vol. 24, no. 5, pp. 1010–1019, 2006. http://dx.doi.org/10.1109/JSAC.2006.872882
- H. White, “A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity,” Econometrica, vol. 48, no. 4, pp. 817–838, 1980.
- H. Mendelson, K. Moon, and Y. Shen, “Behavioral and social effects in a crowdfunding marketplace,” Working Paper, Graduate School of Business, Stanford University, 2019.