The Divergent Effects of Platform Interfaces on Complementor Product Variety

Platform technology regularly evolves, but the consequences for complementors are poorly understood. We contribute to this area by examining the effects of two exogenous changes of platform interfaces on complementor product variety. This outcome underlies indirect network effects for platforms and is also a critical strategic decision for complementors. We find on average, a rating-based platform interface increases complementor product variety, while a customization-based interface decreases it. Complementor status also intensifies the positive effect of rating interface but lessens the negative effect of customization interface. The study shows how interface design is a powerful tool for platform firms to influence complementor behavior, as well as how complementors adapt to platform interfaces. We also extend the product variety literature to the platforms context.