The Role of Quantitative and Qualitative Network Effects in B2B Platform Competition
Article first published online: 21 MAR 2013
Copyright © 2013 John Wiley & Sons, Ltd.
Managerial and Decision Economics
Volume 35, Issue 1, pages 1–19, January 2014
How to Cite
Li, Z. and Penard, T. (2014), The Role of Quantitative and Qualitative Network Effects in B2B Platform Competition. Manage. Decis. Econ., 35: 1–19. doi: 10.1002/mde.2602
- Issue published online: 16 DEC 2013
- Article first published online: 21 MAR 2013
- Manuscript Accepted: 3 FEB 2013
- Manuscript Revised: 12 NOV 2012
- Manuscript Received: 14 FEB 2012
This article aims at investigating how quantitative and qualitative (indirect) network effects impact pricing and trading decisions on a Business-to-Business marketplace. Using an original data set collected on MFG.com, one of the most prominent B2B platforms in the U.S.A., we find that the market share of a marketplace depends on both the quantity and quality of suppliers, but that quality effects tend to substitute for quantity effects as the size of the marketplace increases. These results suggest that while the quantity of suppliers on board is crucial during the early stage of a marketplace, supplier quality matters much more in the mature stage. Copyright © 2013 John Wiley & Sons, Ltd.