Compatibility promotion for standard development within shared platforms:A rising tide does not lift all boats

Abstract

Selective promotion entails the exploitation of resources offered by individual complementors to improve a proprietary platform’s competitive position. However, as governance decisions to endorse a particular complementor are made unilaterally, such promotion is less suitable for shared platforms that are ultimately owned and managed by an ecosystem of heterogeneous, autonomous complementors. We explore compatibility promotion, which involves screening a shared stock of infrastructural resources and making a choice as to which complementor to promote in light of the capabilities the platform seeks to develop. Based on a longitudinal study of a shared platform that evolved around a new technology standard in the Swedish road haulage industry, we explicate how elevating one complementor over others unsettled the governance of the platform and denied the promoted complementors the opportunity to generate the kind of value that their elevated status implicitly promised. This made the platform better off at the expense of the promoted complementor. Our surprising insight lets us theorize why compatibility promotion in shared platforms renders outcomes opposite to those of selective promotion in proprietary platforms.</p