RELATIONAL THIRD PARTY GOVERNANCE: EVIDENCE FROM APPLE’S WORLD WIDE DEVELOPER CONFERENCE

Jens Förderer (2017) – Platform Strategy Research Symposium 2017, Boston, MA

Abstract

Platform strategies require the careful design of instruments for governing third parties. We study the effects of a widespread and costly, yet unexplored instrument that potentially enhances the outputs of third parties: developer conferences. We exploit a randomized quasi experiment in the context of Apple’s 2016 “app” developer conference, the so-called “Apple World Wide Developer Conference”, which is given by the fact that conference acceptance is determined by a random ticket lottery. To assess app developer performance, we rely on monthly panel data from Apple’s App Store. To identify accepted and rejected developers, we use a simple three-question survey. All other things being equal, conference attendance leads to an increase of 1.9% in app ratings and 8.9% in downloads. It is likely that these increases are the result of a consistent change in developer behavior triggered by the conference, rather than the result of a selection effect. This change in behavior seems to be driven by eased access to technical knowledge as well as strategic alignment with Apple, rather than by exchanges among developers. In sum, the evidence here identifies developer conferences as an effective instrument in strategically aligning third parties apart from selection, pricing, and control mechanisms advocated in prior work.

Download the Article below.