首页|Evolution of direct network effects: A perspective of market thickness of an online freight platform

Evolution of direct network effects: A perspective of market thickness of an online freight platform

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The dynamics of network effects present challenges for platforms’ management strategies across development stages, whichhave been overlooked in existing literature. Using data from a Chinese prominent freight exchange platform, this paperexplores the evolution of direct network effects and offers an explanation for the inconsistent findings in existing literature.We find that direct network effects are positive initially but gradually lose significance and eventually turn negative as themarket thickens. We consistently observe asymmetry in direct network effects, initially favoring carriers but shifting to shippersover time. Additionally, shippers experience earlier changes in direct network effects compared to carriers. We attributethe changes over time to the diverse perceptions of platform value resulting from an increased number of peers, as differentforces dominate under different market thickness conditions. Our study contributes to the debate on direct network effects,providing insights into their variability based on market thickness.

Two-sided marketsDirect network effectsMarket thicknessOnline freight exchange platform

Xinyi Lyu、Tiaojun Xiao、Jingquan Li

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Center for Behavioral Decision and Control, Schoolof Management and Engineering, Nanjing University,Nanjing 210093, China

School of Management and Engineering, Nanjing University,Nanjing 210093, China

2024

Electronic markets

Electronic markets

ISSN:1019-6781
年,卷(期):2024.34(1)
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