Motivating Third-Party Providers to Avoid Cross-Side Conflicts: A Random Field Experiment from the Perspective of Value Co-creation and Appropriation in Platform Governance

Platforms strive to resolve cross-side conflicts between different sides, i.e., providers and customers, caused by market frictions. While provider-side undesirable behaviors (e.g., misinformation and delayed communication) have been recognized as main cause of cross-side conflicts, how platforms can effectively motivate providers on platforms to exert best effort to reduce cross-side conflicts has been under-investigated. This study aims to develop solutions that motivate the providers to proactively reduce such cross-side conflicts. Following the platform governance theories, we consider two important components of value-based governance—value co-creation and value appropriation. We collaborate with a peer-to-peer rental platform in China to design and conduct a field experiment in which third-party providers (i.e., hosts in this context) receive the messages regarding the platform’s value co-creation perspectives (i.e., provider-emphasized vs. customer-emphasized) and value appropriation mechanisms (i.e., competition-based vs. cooperation-based). The results show that compared to the control message with no value-based statement, messages with customer-emphasized value co-creation statements can effectively motivate providers to reduce customers’ complaints, whereas provider-emphasized value co-creation statements lead to more such cross-side conflicts. Moreover, value appropriation statements play a significant moderating role in the impact of value co-creation statements. The providers’ granular behaviors are further explored to gain insights on the observed effects. The findings provide actionable implications for platforms on designing effective governance mechanisms.