Decentralization and Platform Usage: Evidence from Decentralized Exchange Platforms
Type
conference paper
Date Issued
2025-07-29
Author(s)
Abstract
Digital platforms are often governed by a centralized organization that acts as the orchestrators and has significant power over complementors or users, which creates the risk that this power may be misused. An alternative governance model are decentralized platforms, where the orchestrator consists of a decentralized organization where ownership and decision-making are distributed among multiple actors. In this paper, we study how a decrease in trust in centralized platforms affects the extent to which users transact on these two types of platforms. Using the collapse of a centralized platform for digital currency exchange as an exogenous shock, we find that users in-creasingly transact on decentralized platforms as a reaction to an erosion of trust in centralized platforms. The magnitude of this effect varies depending on whether long-term relationships with the platform have been established in the past. Our findings contribute to the literature on platform governance by shedding light on how different types of orchestrator governance can affect platform usage.
Language
English
Keywords
platforms
ecosystems
decentralization
digital
HSG Classification
contribution to scientific community
Refereed
Yes
Volume
2025
Number
1
Event Title
85th Annual Meeting of the Academy of Management
Event Location
Copenhagen, Denmark
Event Date
July 25-29, 2025
Subject(s)
Contact Email Address
moritzottonafeh.dalheimer@unisg.ch