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Quantity Vs. Quality in Online Marketplaces: The Case of Kiva

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Information Technology for Management: Current Research and Future Directions (AITM 2019, ISM 2019)

Part of the book series: Lecture Notes in Business Information Processing ((LNBIP,volume 380))

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Abstract

This paper studies Kiva, the world’s largest online, peer-to-peer social lending marketplace. We consider two stages in the development of the Kiva marketplace: a growth stage when Kiva was focused on quantity, and a maturity stage when Kiva shifted to emphasize quality (broadly defined). Our starting point is the common hypothesis that marketplace success is driven by network effects which facilitate growth – a quantity focus. We argue, however, that as a marketplace becomes mainstream, it focus shifts to improving quality – creating additional sources of value for users by adding capabilities and improving the user experience. We test this proposition using data from Kiva. Our proposition is supported: while network effects are strong and significant during the early growth phase of the marketplace, they become weak or disappear as the marketplace becomes mainstream. We study the implications of our findings for the deployment, implementation and management of online marketplaces.

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Author information

Authors and Affiliations

  1. Stanford University, Stanford, CA, 94305, USA

    Haim Mendelson

  2. Microsoft Corporation, Sunnyvale, CA, 94089, USA

    Yuanyuan Shen

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  1. Haim Mendelson
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  2. Yuanyuan Shen
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Correspondence to Yuanyuan Shen .

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Editors and Affiliations

  1. University of Economics in Katowice, Katowice, Poland

    Ewa Ziemba

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Mendelson, H., Shen, Y. (2020). Quantity Vs. Quality in Online Marketplaces: The Case of Kiva. In: Ziemba, E. (eds) Information Technology for Management: Current Research and Future Directions. AITM ISM 2019 2019. Lecture Notes in Business Information Processing, vol 380. Springer, Cham. https://doi.org/10.1007/978-3-030-43353-6_5

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  • DOI: https://doi.org/10.1007/978-3-030-43353-6_5

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  • Online ISBN: 978-3-030-43353-6

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