How Do Digital Market Platform Hosts Exercise Control Over Sellers?

Abstract

High speed connectivity, smart mobile devices, social media, and rapidly-proliferating end-user applications have given rise to digital markets. This paper investigates how digital market hosts exercise control over sellers. The authors propose that findings from prior empirical studies informed by control theory in other contexts might not fully apply to digital markets, since these platforms are loosely connected to participants. The three-case study revealed that, similar to controllers in other contexts, digital market hosts do utilize a mix of formal and informal control mechanisms, yet their seller control portfolios also differ importantly from control portfolios in other contexts. This paper presents the study findings, considers questions arising from the findings, and provides a useful foundation for further research that can consider why digital markets entail challenges that give rise to novel control portfolios.