Multihoming Users' Preferences for Two-Sided Exchange Networks

Our research analyzes users’ preferences for two-sided exchange networks that serve distinct but interdependent types of users (e.g. buyers and suppliers). To do this we look at multi-homing users’ participation on multiple independent and competing platforms. We use a unique dataset of 118 multihoming buyers’ participation in two online exchanges and examine how activity levels on both sides of these exchanges affect users’ preferences for the exchanges. We find that users’ preferences are positively associated with activity levels on the opposite side of the platforms. Higher inter-network activity levels positively affect users’ perception of a platform’s usefulness and motivate increased participation on that platform relative to the competing platform. We also find that users’ preferences are non-linearly related to activity levels on the same side of the platform. At low intra-network activity levels, an increase in activity level has a positive effect on users’ preferences. This effect may derive from the principle of social proof, where individual users observe and imitate other similar users’ behaviors. At high intra-network activity levels, there is a negative effect of increased activity level due to greater competition among users on the same side. Our results show how competition between networks serving the same users is affected by the social information conveyed by other users participating on each network. It complements the existing IS literature, which typically focuses on single-homing users and/or one-sided network technologies.