Incentive alignment in ecosystems: The role of complementarity types and multi-sided bargaining

Deskripsi

Alignment of incentives to improve value creation in ecosystems is crucial to their growth and survival. We examine how two fundamental ecosystem features affect alignment: types of complementarities and their interplay with multi-sided bargaining over value. Using a formal model, we find that multi-sided bargaining typically causes misalignment, in patterns that vary dramatically depending on the type of complementarities. For instance, we find that multiplicative complementarities typically entail weak alignment among participants. In contrast, when value creation is constrained by the weakest component, alignment can be alternatively very strong or very weak. We also find that the starting levels of participants' functionality matter. This suggests new avenues for assessing ecosystem performance and the potential for alignment among participants.