Customer complaint avoidance: a randomized field experiment of platform governance based on value co-creation and appropriation1

From the theoretical perspectives of value co-creation and value appropriation in platform governance, this study explores how a platform can design motivation mechanisms to induce the proactive efforts of providers to reduce customer complaints. We conducted a field experiment on a major Chinese peer-to-peer real estate platform offering long-term rental properties. Specifically, when a renter (customer) complaint about a host (provider) occurs, we sent reminder messages to other unaffected hosts in the same neighborhoods (as the affected host) and urged them to proactively prevent similar complaints. The reminder messages varied in terms of their emphasis of the roles of different stakeholders in platform-based value co-creation (provider-emphasized vs. customer-emphasized) and how they explicated different value appropriation mechanisms (competition-based vs. cooperation-based). Results show that compared to the control message, customer-emphasized messages effectively motivated providers' proactive efforts to reduce customer complaints. Contrastingly, provider-emphasized messages led to the undesirable outcome of increasing customer complaints, possibly due to providers' shirking behavior. We also found that a competition-based value appropriation mechanism strengthened the motivating effect, whereas a cooperation-based mechanism undermined the motivating effect. The study provides important theoretical and practical implications for platforms on the design of effective governance mechanisms.