Relational Third-Party Governance: Evidence From Apple’s World Wide Developer Conference
Year: 2017
Type: preprint
Abstract: We study the value of personal connections between market participants and market makers when the desired outcome is innovation. Our empirical context is Apple’s annual developer conference, the so-called “Apple World Wide Developer Conference”. Our identification strategy exploits the fact that conference attendance is determined by a random ticket lottery. Thus, only variation in attending developers’ outcomes can come from personal connections established with Apple during the five-day conference. Surprisingly, during the weeks following the conference, attending firms experienced a strong increase in performance: compared to non-attendees, they were more than 80% more likely to be publicly promoted in Apple’s App Store, and their apps sharply increased in consumer demand and appeal. Analyses of various rival explanations let us conclude that personal connections, such as the ones enabled by WWDC, provide platform owners with superior access to information that ultimately allows better allocation of complements to consumers. The evidence here identifies personal relationships to excel in situations in which consumer side mechanisms fall short or when active monitoring is required. At a minimum, attendees’ superior ex post performance indicates that personally connected complementors are fundamentally different – namely better – than those lacking such relationships.
Source: SSRN Electronic Journal
Author: Jens Foerderer
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2552402791