The Divergent Effect of Competition on Platforms: Deterring Recruits, Motivating Converts

Abstract

Knowledge platforms differ in how they source their knowledge; they can be categorized as traditional (e.g., Encyclopedia Britannica, Guide Michelin) or crowdsourced (e.g., Wikipedia, Yelp). Although research has compared and contrasted the two, we study how they compete with one another. In particular, we focus on how competition from traditional platforms affects volunteers’ contributions to crowdsourced platforms. We propose a divergent effect: competition increases individual contributions from volunteers who were already active before the entry of any competitor (pre-entry contributors). However, competition also hinders recruitment and therefore leads to a decrease in total contributions from the set of volunteers who are new to the platform in a given time period (newly recruited contributors). We suggest the first effect is driven by pre-entry contributors’ ideological attachment, whereas the second is driven by lower awareness of the platform postcompetitive entry. To test our theory, we leverage and examine how the phased entry of Google Maps in different countries affects contributions to OpenStreetMap, a crowdsourced mapping platform. We find the hypothesized divergent effects and provide suggestive evidence of the underlying mechanisms. We contribute to research on crowdsourcing, volunteers’ willingness to contribute, platform competition, and on the effect of competition on organizations more broadly. Funding: The authors acknowledge the financial support of the INSEAD Alumni Fund. Supplemental Material: The online appendices are available at https://doi.org/10.1287/stsc.2022.0125 .