How Do Platform Interventions Affect the Buyer-Seller Relationship?

A platform, which serves as an intermediary in two-sided markets, enables value-creating interactions between buyers and sellers. In the context of e-commerce, I present three studies regarding how e-market platforms play a role in curtailing information asymmetry and fostering efficient transactions between buyers and sellers. First, I empirically examine how certificates (or seals), issued by the platform to sellers, affect buyers’ purchase and post-purchase decisions. The results reveal that certificates increase the likelihood of order termination due to the psychological contract violation (PCV) and such PCV experience negatively affects buyers’ future consideration process and purchase decision. Second, I present empirical evidence regarding how platform promotions reshape buyer segments in the market, which affects the effectiveness of sellers’ promotions. Third, based on analytical and empirical analyses, I explain that the optimal promotion strategies of sellers, responding to platform promotions, depend on their market power.