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Orchestrating the Co-creation of Value in P2P Lending Platforms: An Agent-Based Modelling Study
Authors: Maria Veronica Torres Pena (The University of Melbourne, Australia), Christoph F. Breidbach (The University of Melbourne, Australia), Andrew Turpin (The University of Melbourne, Australia)
Firms need to coordinate and facilitate value-creating processes for their customers in order to succeed in increasingly competitive marketplaces. This orchestrating role of the firm has traditionally been achieved through dedicated frontline employees. Today, however, digital service platforms orchestrate value co-creation processes by connecting other interdependent actors. One example is the context of peer-to-peer (P2P) lending, where service platforms enable and guide interactions between prospective borrowers and lenders in financial service transactions. However, despite being a key priority for service research, limited attention has been paid to investigating how digital technologies orchestrate value co-creation processes.
This study aims to address this important gap in knowledge by exploring (1) how digital technologies orchestrate interactions between economic actors in service ecosystems, and (2) to assess the performance implications for service ecosystems where digital technologies are deployed as a service orchestrator. We address these questions through agent-based modeling (ABM) simulations set in the context of P2P lending, using data from the P2P lending site LendingClub.com. ABM enables us to capture fundamental service ecosystem properties like self-organizing practices and structure emergence, thus explaining service ecosystem assemblage, behavior, and evolution.
This study offers three important contributions to service research. First, we analyze the effects of digital orchestration mechanisms on service ecosystem performance. Specifically, we provide empirical insights that service orchestration through platforms has on actors’ interactions, resource integration, and resource density. Second, we offer a methodological contribution to service research by introducing and demonstrating the applicability of ABM for the study of value co-creation in platform-based service ecosystems. Specifically, we provide future service researchers and practitioners attempting to investigate value co-creation and digital orchestration with a blueprint on how to use ABM as a new research method. Finally, our findings have design implications relevant for the orchestration of value co-creation on digital platforms and, in particular, P2P lending platforms.