Complementor Strategy and Platform Performance

Platform strategies have been studied extensively, while much less attention has been paid to understand how complementor strategies and their heterogeneity affects platform performance. To address this gap, we formalize complementor strategy and examine its effects on platform performance with an agent-based simulation model. Specifically, we operationalize complementor strategy as an emergent equilibrium outcome of a dynamic adaptation to maximize their profitability in a changing competitive landscape. The simulation results show that, even if we assume complementors were homogenous both in their initial strategic attributes (i.e., quality, type and price) and in their strategy adaptation process, equilibrium complementor strategies show significant heterogeneity. We thus argue that the reality where competitive outcomes of complementors are skewed can simply be attributable to their strategic adaptation, an inherently boundedly rational process due to dynamic complexity. Our results highlight importan...