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Managing External Innovation: The Case of Platform Extensions

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egulatory body within their network or ecosystem. <strong>Platform</strong> owners play the role <strong>of</strong><br />

public authority, and they impose regulations to reduce the negative impact on the quality<br />

<strong>of</strong> the platform. <strong>The</strong>re are number <strong>of</strong> instruments that are called “regulatory instruments”<br />

to help platform owners enforce regulations in their ecosystem (Boudreau & Hagiu,<br />

2009).<br />

Regulatory instruments are a menu <strong>of</strong> options that platform owners use regulate relations<br />

among members in their network, such as pricing, platform design and legal means (e.g.<br />

licensing, developers’ agreement, etc) (Bosch & Bosch-Sijtsema, 2009; Boudreau &<br />

Hagiu, 2009). <strong>The</strong> regulatory menu <strong>of</strong> instruments includes: pricing, legal and contractual<br />

instruments, platform architecture, toolkits and sandboxes (Boudreau & Hagiu, 2009; von<br />

Hippel; Bosch & Bosch-Sijtsema, 2009).<br />

In our research we focused on instruments that platform owners are <strong>of</strong>fering for extension<br />

development and quality assurance, such as toolkits (Thomke & von Hippel, 2002;<br />

Messerschmitt and Szyperski, 2003; Boudreau & Hagiu, 2009). In the next five sections<br />

we are going to discuss the different types <strong>of</strong> instruments in general, such instruments<br />

include: pricing, legal and contractual instruments, platform architecture, user toolkits,<br />

and sandboxes.<br />

Pricing and membership<br />

Pricing and membership are two forms used to regulate information access and<br />

transactions on the platform. Pricing or membership refers to the pricing schema set by<br />

the platform owner to charge third-party developers for gaining access rights to the<br />

20

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