Participation On Digital Platform

Journal of Management Information Systems
ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/mmis20
In the Realm of Hungry Ghosts: Multi-Level Theory

for Supplier Participation on Digital Platforms
Abhishek Kathuria , Prasanna P Karhade & Benn R. Konsynski
To cite this article: Abhishek Kathuria , Prasanna P Karhade & Benn R. Konsynski (2020) In the
Realm of Hungry Ghosts: Multi-Level Theory for Supplier Participation on Digital Platforms, Journal
of Management Information Systems, 37:2, 396-430, DOI: 10.1080/07421222.2020.1759349
To link to this article: https://doi.org/10.1080/07421222.2020.1759349
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JOURNAL OF MANAGEMENT INFORMATION SYSTEMS
2020, VOL. 37, NO. 2, 396–430
https://doi.org/10.1080/07421222.2020.1759349
In the Realm of Hungry Ghosts: Multi-Level Theory for Supplier

Participation on Digital Platforms
Abhishek Kathuriaa, Prasanna P Karhadeb, and Benn R. Konsynskic
a
Information Systems, Indian School of Business, Hyderabad, Telangana, India; bInformation Technology
Management, Shidler College of Business, University of Hawai’i at Mānoa, Honolulu, HI, USA; cInformation
Systems and Operations Management, Goizueta Business School, Emory University, Atlanta, GA, USA
ABSTRACT KEYWORDS
Digital platforms have transformed various industries, with profound Digital platforms; multi-level
changes witnessed in settings characterized by repeated, low value, and theory; induction; abduction;
novel transactions, such as ride sharing, household services, and food decision trees; big data;
emerging markets; platform
delivery. Platform providers need to understand the factor(s) that sup-
growth; platform
pliers consider before choosing to participate on their platforms. We participation
argue that multi-level theorizing is necessary to explain the patterns of
decision criteria that constitute the complex, yet boundedly-rational
decision of platform participation. We draw on multiple theoretical
perspectives which include predictors from firm-level strategic behavior,
firm-level digital predictors, institutional predictors, and platform level,
competition and contextual (environmental) predictors to model restau-
rant’s decision to participate on food delivery platforms, which are an
exemplar of platforms that digitize transactions of ubiquitous and epi-
sodic nature. The population of 95,735 restaurants, serving a total of 135
different cuisines, located in the 37 largest cities of India, forms the
dataset for developing our multi-level theory. Our decision tree induc-
tion methodology, which employs high levels of pruning, empowers us
to discover context-specific rules that serve as credible approximations
of the partial ordering of decision flows tacitly used by restaurants in
deciding to participate on platforms. We identify six combinations of
predictors, that is, decision rules, which are situated in at least four
theoretical perspectives, to succinctly explain supplier participation on
digital platforms. Finally, we abduct away from these specific decision
rules to develop generalizable theoretical propositions. The decision
trees, context-specific rules, general forms of the rules, and generalized
propositions together form our multi-level theory for supplier participa-
tion on digital platforms. Our findings aid platform providers identify
suppliers who can be the focus of efforts to increase platform participa-
tion, and help suppliers identify the participation status of competitors.
For policymakers, our findings imply that incentives at the ends of the
pricing spectrum can increase supplier participation on digital
platforms.
Introduction
Digital platforms have transformed various industries, with profound changes witnessed
in settings characterized by repeated, low value, and novel transactions, such as ride
Benn R. Konsynski benn.konsynski@emory.edu Information Systems and Operations Management, Goizueta

Business School, Emory University, 1300 Clifton Road, Atlanta, GA 30322, USA.
Abhishek Kathuria and Prasanna P. Karhade contributed equally and are co-first authors.
Online supplement for this article can be accessed at here
Copyright © Taylor & Francis Group, LLC
JOURNAL OF MANAGEMENT INFORMATION SYSTEMS 397
sharing, household services, and food delivery. Such transactions and their complexities
were incompatible with the ethos of the past pre-platform era, wherein efficiency was
sought through the simplicity of one-off, high value transactions. However, in the era of
digital platforms, their repetitive nature has engendered a tolerance and economic viability
of these low value complex transactions. Ergo, convenience is the new organizing principle
co-evolving with the emergence of platforms that facilitate repeated, low value, and novel
transactions. Digital platforms offering food delivery are an exemplar, wherein the ubi-
quitous and episodic nature of transactions contrasts with the ephemeral and non-
reoccurring nature of high value transactions. Since such platforms serve large potential
markets but are non-exclusive with minimal ability to lock-in users (due to low multi-
homing costs), they have hitherto witnessed large investments and elusive profitability.
Thus, there has been substantial managerial and academic interest in the study of such
digital platforms.
This research has extensively examined strategic choices from the point of view of
platform providers (e.g., [1, 19, 40, 86]); however, there have been calls for more attention
to choices from the point of view of platform participants (e.g., [88]). For platform
providers, participation of users is a necessary condition to attain a critical mass, which
enables tipping the market in favor of the platform and potentially establishing winner-
takes-all dynamics. Additionally, participation is vital for deeper engagement between the
platform and its users. Hence, user participation (for example, participation of restaurants
and consumers) is essential for the growth and survival of a digital platform and platforms
are thus interested in incentivizing participation. Research suggests that the two sides that
participate in repeated, low value, and novel transactions on digital platforms differ in
their price sensitivities. Suppliers value quantity more strongly over quality of the other
side (consumers) and hence have relatively lower sensitivity to price, whereas consumers
are relatively more price sensitive. Hence, subsidization of the price sensitive side (e.g.,
consumers) attracts more consumers, in turn attracting the quantity conscious side (e.g.,
restaurants). The implication of this logic is that the money side ostensibly does not have
a choice regarding platform participation. This unstated assumption is reflected in prac-
tice, where platform providers anecdotally espouse a similar view: once you attract
consumers, suppliers have no choice but to join the platform!
However, from the suppliers’ perspective, platform participation is a complex and
strategic choice. Market access is a potential upside, wherein platform participation can
potentially connect a supplier to additional online consumers, enhancing the supplier’s
business. Market risk is a potential downside, wherein coping with unpredictable plat-
form-driven demands can be difficult and failing to reliably serve online orders can have
costly repercussions such as diminished online ratings and/or loss of business. These
issues are reflected in observations where practice diverges from theory — despite low
multi homing costs, many taxi operators, hotels, and restaurants do not participate on
digital platforms, such as Uber, Oyo, and Zomato, with large numbers of participating
consumers. Ergo, whereas platforms incentivize consumers to participate, there are inade-
quate incentives and contingencies for suppliers to exercise their strategic choice of
platform participation. Thus, platforms, like hungry ghosts, are unable to satiate their
yearning for growth due to the constriction imposed by insufficient supplier participation.
Why do suppliers choose to participate on digital platforms that facilitate repeated, low
value, and novel transactions?1 This fundamental, yet complex question has strong
398 KATHURIA ET AL.
theoretical, managerial and policy implications, especially in emerging economies where

digital platforms have tremendous potential for growth. Although research has examined
the influence of various factors on platform participation, most of these examinations have
been conducted at a single2 level of theory due to data and/or methodological limitations.
However, the following statement informs our approach towards this question – “the
platform facilitates firms to compete with other firms within a market.” This necessitates
a multi-level theoretical investigation as platform participation is collectively influenced by
various constructs across multiple levels of analyses [89] — the platform, the firm, its
competitors, and the market (environment). Furthermore, decision making processes are
emergent knowledge processes as they involve intellectual activities, expert knowledge,
and diverse factors in unstructured and unpredictable combinations [50]. Since platform
participation decisions encompass multiple levels, and each level often has (multiple)
constructs, a multilevel approach is necessary to investigate the influence of the constructs
and their emergent interactions across multiple levels [58], while also requiring the
integration of multiple theories as a single, homogenous theory cannot be applied across
levels [32]. Furthermore, platform participation is not a single decision, but encompasses
patterns of decision sequences. This decision journey, namely the partial orderings of its
constituent decision points and forks are as critical as the final decision outcome itself.
Hence, to broaden our understanding of supplier participation on digital platforms, it is
important to develop explanations that flow back and forth between multiple levels and
illuminate the decision journey.
We address this research gap by leveraging a multi-level, multi-theoretic approach that
broadens notions of emergence in decision making logics [50] by incorporating recent
guidance on multi-level theorizing [58]. We analyze a unique population-sized dataset
using an inductive data-driven analytics methodological approach. Decision tree induction
serves as the basis for identifying patterns in the data and consequently serves as a vital
input to the abduction process which generalizes the patterns to the most plausible
explanation. The specific context for our study is the entire population of (registered)
restaurants in India. India, a fast growing major economy, is a setting for an increasing
number of research studies (e.g., [41-43, 45, 91]). By leveraging fourteen predictors across
supplier-, institutional-, platform-, competition-, and environment-level perspectives, we
investigate suppliers’ (in this case, restaurants) decision to participate in the food delivery
services of a (non-exclusive) digital platform. This platform is a comprehensive review and
rating site and all restaurants are listed on the platform, irrespective of whether they
participate in the delivery service. Thus, a key strength of this research design is that it
addresses potential concerns stemming from sample selection bias.
The question we investigate is of importance for policy makers, as the key motivation
for the Government of India’s flagship Digital India policy initiative is to encourage
various stakeholders in the economy to leverage Information Technology (IT) and online
platforms to improve efficiencies and governance of their business transactions [53, 54].
Though this policy has resulted in several initiatives across different areas, including
governance, records and payments, digital transactions have been a focus. Since food is
a basic necessity of life, it involves large numbers of small value, yet novel transactions –
a ripe opportunity for digital transformation and for examining our research question.
Furthermore, the online food delivery market in India is non-trivial. In 2016, India’s
restaurant industry was estimated to be US $56 billion in size [3] and the delivery market
was estimated at US $15 billion [76]. Though only 2% of all restaurant orders in India are
online deliveries, the potential market is large as online deliveries account for 11%, 13%
and 32% of all orders in China, the US, and the UK respectively [3], while globally, more
than 30% of the US $102 billion of food delivered to customers is ordered online [31].
Correspondingly, online delivery of restaurant orders in India has grown by over 30%
each year between 2016 and 2019. As only 26% of Indians currently have access to the
internet, the growth in this segment will increase as online access, incomes, and aspira-
tions continue to grow.3 Accordingly, we started with the population of nearly ninety-six
thousand restaurants in India, and after eliminating data points with missing values on
key predictors, we analyzed platform participation decisions of over forty-five thousand
restaurants in the top seven metropolitan cities of India to inductively build multi-level
theory.
Decision trees can shine the light on the flow of the decision-making process and
model the supplier’s decision journey constituting their cumulative experiences as they go
through the decision of platform participation [49]. Our decision trees were grown using
the C4.5 decision tree classification algorithm [65, 66] and were aggressively pruned to
discover the underlying tacit structure of the data. Though only few studies have utilized
this methodology in the past [62, 85], recent methodological advancements and our large,
population-level dataset enable us to better leverage this method and benefit from its
advantages, which include a low rate of false positive predictions [80]. We then followed
the logic of abductive discovery,4 a third type of logical conclusion, to articulate generic
propositions for platform participation. In abduction, data is interpreted to discover
combinations of features for which there is no appropriate explanation in the store of
extant knowledge [68]. The explanation must be discovered or interpreted with the aid of
intellectual effort [59, vol. V, p. 117]. This sequence of induction and abduction is
appropriate as a supplier’s decision journey and combination of decision sequences it
encompasses cannot be theorized ex-ante.
The rest of this manuscript is organized as follows. In the next section we present an
overview of literature in related research areas and identify key gaps in our collective
understanding. In the subsequent section, we describe the tree induction methodology, the
research context and the data used in the empirical investigation. We then present
findings that are a result of a two-phase investigation. We discover six context-specific
rules that incorporate interactions across three theoretical levels, situated in at least four
theoretical perspectives. We also offer general forms of these six context-specific rules. We
present strong evidence to suggest that knowledge discovered in this study is robust and
explains suppliers’ platform participation choices compactly and accurately (the prediction
accuracy of our decision models is greater than 70%). We abduct away from the six
context-specific rules and their general forms to arrive at four generic propositions; all
these together form multi-level theory for supplier participation on digital platforms. We
conclude by discussing the implications of our findings for specific theories, theory
building, and offering rich managerial and policy-related implications of our research.
Overall, we contribute to our theoretical understanding of platform participation by
demonstrating that an inductive data-driven analytics approach followed by abductive
discovery yields unique insights and knowledge for explaining suppliers’ platform parti-
cipation decisions by elegantly integrating multiple theoretical perspectives across multiple
theoretical levels.
400 KATHURIA ET AL.
Background Literature and Theory Development

Firms in various industries are increasingly leveraging online two-sided platforms, which
“facilitate transactions among firms and/or individuals who may not have been able to
transact otherwise” [52, p. 141]. Platforms are proliferating across many traditional indus-
tries, such as real estate, trucking, and shipping, and are now increasingly reshaping the
economy through a growing proportion of digitally-mediated business transactions [40].
Digital platforms have also stimulated the emergence of new business models in contexts
involving repeated, low value, and novel transactions, such as ride sharing, household
services, and food delivery. The key property of platforms and networks around these
platforms is the concept of network effects [1, 14]. Platforms with larger number of other
users with whom interactions can be performed are valued higher by users [10].
Complementary products and services form another source of value for platform-
mediated networks [69]. Platforms have received significant attention recently and
a common theme in research investigations pertains to the strategic choices of platform-
provider firms regarding platform participation. This research tends to conceptualize plat-
forms as multi-sided markets in which suppliers (producers) on one side compete to sell to
consumers (users) on the other side [5]. Suppliers provide, and consumers utilize, the
primary product or service exchanged through the platform.5 Thus, platform providers
pursue strategies to aggressively attract consumers, whose demand would in turn attract
suppliers, leading to network-effects based winner-take-all dynamics [1, 10]. Attracting
platform participation is a singular strategic aim for platform providers and thus the
dynamics of platform participation has been an area of emphasis in the literature [5, 21, 52].
Key Thematic Issues

Two themes emerge from our review of the extant literature (see Table A1 in Online
Supplemental Appendix A for a list of indicative papers). The first point is that prior research
has focused heavily upon inter-platform competition and behavior [e.g., 18, 69]. For example,
some studies have examined how providers of digital platforms leverage design, governance
and capabilities to compete against other platform providers [1, 40]. McIntyre and Srinivasan
[52] provide a succinct summary of this literature and its current perspectives. Few studies
have examined intra-platform competition and behavior (c.f. [2, 74, 87]). For example, some
research has examined activities of participants on App stores, browser extensions and open
source platforms [33, 77, 88]. The result of this focus has been that prior research adopts
a platform provider perspective (e.g., [86, 98]). Thus, studies have focused on understanding
strategies by which platform providers can increase the size of their installed base, and not on
why suppliers participate on a specific platform [52]. Note that participating on the platform
is a deliberate, endogenous choice made by independent suppliers, constrained by, but not
isomorphic with the suppliers’ other strategic choices and resource endowment. Thus,
focusing on the platform, rather than suppliers, as the stakeholder of interest masks intra-
platform differences among suppliers and how these lead to their choice of participating on
the platform. Accordingly, we study nearly ninety-six thousand potential suppliers.
The second issue to note is that use of the term “platform” has proliferated in the
recent decade, and has been used in multiple contexts, with considerable variation [89].
Most extant literature has focused on platforms of the software variety (e.g., [84, 87, 88]),
with Tiwana et al.’s definition “extensible codebase of a software-based system that

provides core functionality shared by the modules that interoperate with it and the
interfaces through which they interoperate” [89, p. 675] a commonly accepted norm.
However, a number of studies utilize more expansive definitions of platforms that
include not only software and technical artifacts, but also encompass norms, practices,
business processes, physical assets, stakeholders and their interactions [1, 40, 52]. These
definitions consider platforms as interfaces embodied within products, services or tech-
nologies that may, but not necessarily, serve as the foundation on which other firms may
build related products, services or technologies [52]. There is less focus on such con-
ceptualizations of digital platforms in the literature. We choose this conceptualization in
this study.
Theoretical Levels for Platform Participation

Research has identified several strategies followed by platform providers to attract suppli-
ers [e.g., 21, 72]. These are primarily monetary incentives (discounted platform access,
subsidized product development) [52], as well as marketing activities (sponsored confer-
ences, marketing campaigns) [5], technological interventions (customized platform fea-
tures, complementary tools) [21, 52], and governance [87, 90]. We focus on factors that
influence participation from the perspective of the supplier.
Platform participation is dependent upon a variety of supplier level constructs. Suppliers
may be reluctant to use the platform without seeing any direct financial benefit [35].
Technology savvy suppliers may be more willing to participate on a technology-based
platform than their non-savvy peers [96]. The threats of expropriation or imitation by the
platform provider are other key hindrances to participation [57]. Strong intellectual property
rights and downstream capabilities enable suppliers to withstand these threats and hence
such suppliers may be more willing to participate on the platform [9, 35]. Backward
compatibility is also an important attribute that drives platform participation as it lowers
suppliers’ switching costs associated with either migrating to a new platform or upgrading to
a new generation of the platform [27]. Finally, high coordination costs, which reflect effort
required of a supplier to manage dependencies with the platform, can lead to platform
desertion [88]. These constructs reside at the level of the platform provider or supplier.
However, as noted earlier, there exist multiple levels of analyses, including institutional,
platform, competition, and environmental levels, which encompass multiple constructs that
influence participation of suppliers on a digital platform.
Predictors within Theoretical Levels

We now introduce multiple theories to unfold the different predictors at each level. Table
A2 in Online Supplemental Appendix A summarizes critical information regarding this
theoretical setup.
Supplier-Level Predictors
Foundational tenets from the strategic management literature inform our choice of key
supplier-level predictors in our theory. First, the generic strategy (cost leadership, differ-
entiation, focus, broad scope/narrow scope) followed by a supplier determines its strategic
402 KATHURIA ET AL.
profile and consequently, its key strategic decisions [63, 64]. A restaurant’s Price Range,
which is the price of a meal for two persons at the restaurant, reflects the strategic profile
of the restaurant, and hence is included in our theory as a supplier-level predictor.
Similarly, whether a restaurant offers Only Vegetarian food, or provides Only Indian
food as opposed to international cuisines, reflects its strategic focus. Second, literature
on organizational ecology suggests that generalist and specialist suppliers make different
strategic choices [8, 28]. This division is reflected in the Number of Cuisines offered by the
restaurant; generalists offer multiple cuisines, whereas specialists offer single cuisines.
Finally, organizational identity is a fundamental notion that influences suppliers’ strategic
behaviors. Several attributes of restaurants can reflect their choice of identity and hence
are appropriate supplier-level predictors for our theory. These attributes of a restaurant’s
identity are whether it Serves Alcohol, Offers Parking, and offers additional On-Premise
Features (such as live entertainment, music, telecast of sporting events) to encourage
customers to visit and dine in the restaurant. Also, alcohol is an additional product and
source of revenue for restaurants, whereas investments in on-premise features indicate
high resource endowment.
Supplier-Level Digital Readiness Predictors

Digital investments and digital strategic posture of an organization influence its strategic
behavior [55]. This is manifested across many contexts, including in the context of
platforms, where technology savvy suppliers are more likely to use the platform [96].
Technology savviness or digital readiness of restaurants can be encapsulated with two
customer-facing predictors. The first, Uses e-Wallets, corresponds to readiness to use
technology in financial transactions with customers, while the second, Offers Wi-fi
Access, reflects readiness to enable digital social interactions by customers. These are
included as supplier-level digital readiness predictors.
Institutional-Level Predictors
Institutional theory suggests that organizations that are similar to one another tend to
imitate strategic actions, especially when faced with new and uncertain phenomena with
high risk [15, 16]. A key institutional-level predictor of platform participation in the
context of restaurants, corresponds to whether a restaurant is part of a group of restau-
rants that form an “institutional chain” or community, which reflects a well-established
ethos6 and hence are likely similar with regards to their propensity to participate on
platforms [73]. Thus, Number of Outlets, which reflects the number of restaurants with the
same name, is a plausible institutional-level predictor of platform participation.
Platform-Level Predictors
Prior research suggests that online ratings influence different types of strategic decisions
by ratees (e.g., sellers with low ratings are more likely to exit eBay [6]). A restaurant’s
online Rating represents its reputation or social capital in the digital world. Overall, since
all the information contained in online reviews is distilled in one final online rating [22], it
is sufficient and parsimonious to include the overall online rating7 as the sole platform-
level predictor in our theory.
Competition-Level Predictors
Spatial concentration of industry has been an enduring area of inquiry across the fields of
economics, sociology and strategic management. This perspective posits that organizations
receive positive returns to scale at the regional level and thus the benefits a firm receives
co-locating with other firms increase as the number of other firms increase. Another
perspective explains the co-location of firms as a result of the geographic distribution of
resources (e.g., [78, 79, 82]). This literature suggests that organizations receive negative
returns from heavy concentration of competition and thus the benefits a firm receives co-
locating with other firms decrease as the number of other firms increase.
We draw two implications for our study. First, spatial concentration of suppliers is an
important determinant of behavior due to the presence of both positive and negative scale
effects. In geographically crowded areas, restaurants may benefit from increased footfalls,
spillover effects and better bargaining power with their vendors, and conversely, they may
suffer from competition generated by a heavy concentration of nearby competitors.
Accordingly, we include Competition Concentration in our theory. Second, number of
spatial competitors of a specific supplier who participate on the platform will differ from
the number of participating spatial competitors of other suppliers because of uneven
geographic distribution of resources. Restaurants in clusters where a large majority of
competitors have chosen to participate on the platform are likely to experience competi-
tive pressures to imitate this strategic choice. This proportion, Participant Concentration,
is also included in our theory as a competition-level predictor.
Environment-Level Predictors
Macro-level environmental contingencies play a key role in the strategic behavior of firms.
In the context of platform participation, these macro-level environmental (contextual)
differences are encapsulated in the predictor Market Maturity. Markets or geographies
that are older and mature present different motivations for suppliers to participate on
platforms as compared to newer and immature markets [44, 48]. In mature markets, there
may exist long established alternatives to platform-based delivery and services and hence
there may be lesser propensity for restaurants to participate.
Methods
Research Context
Digital India, a foundational policy initiative of the Government of India, is motivated
with the objective of digitizing business transactions and services. This has strong govern-
ance implications and is an enabler and beneficiary of other key policy initiatives [53, 54].
Food is a basic need and digitization of food delivery and payment transactions, touching
every stratum of Indian citizenry, can have a deep and widespread transformative impact.
Thus, our research context lends itself to policy implications and participation on food
delivery platforms is a potential indicator of the success of Digital India initiatives.
India has a vibrant and competitive startup ecosystem and has been the third-largest
recipient of venture capital between 2013 and 2018 [37]. While several India-based food
delivery platforms have received venture funding, many have failed to survive [38]. After
shake-up and consolidation of the industry, by November 2017, there were five major
404 KATHURIA ET AL.
platforms in operation. We chose one of these platforms for our analysis.8 We chose this
particular platform (among the five alternatives) for three reasons. First, this platform is
a comprehensive review and rating site that provides food discovery and delivery services.
All restaurants are listed on the platform, irrespective of whether they participate in the
delivery service. Thus, concerns stemming from sample selection bias have been
addressed. Second, this platform consistently does not levy fees from customers and
thus does not cross-subsidize restaurant participation. In doing so, the restaurants’ plat-
form participation choices are not influenced by the dynamics of underlying fee/payment
structure. Third, this platform has a pan-India presence and has been in operation for
more than 2 years in all large cities in India.9
Restaurants across India are part of the sample if they are listed on the platform. Any
consumer can list a restaurant on the platform; listed restaurants can garner reviews and
ratings from other consumers. The restaurant owner must claim the listing if she wishes to
provide verified details such as an official menu, contact information and opening hours.
A key strategic choice that restaurant owners must make is to choose if they wish to
participate in the food delivery service of the platform. Thus, mere listing on the platform
does not imply participation. Further, participating restaurants receive orders from cus-
tomers through the phone, website and mobile app. Orders can be delivered by the
restaurant, by a third-party logistics partner, or by the platform’s own delivery team.
Restaurants pay the platform a percentage fee of the order value as per a multi-tier
structure, whereby restaurants that have a high rating on the platform pay the lowest
fee and low rated restaurants pay the highest fee.
In our setting, a supplier (restaurant) has the choice to participate on zero, one or many
digital food delivery platforms. Therefore, multi-homing costs (the costs of affiliating with
multiple platforms) are low. Research suggests that winner-take-all outcomes are unlikely
in this context [25]. Multiple users are connected to a digital platform and thus each type
of user constitutes a side of the multisided digital platform. Restaurants produce the core
product (food that is to be delivered), and also advertise on the platform. Complementary
services are provided by delivery and logistics companies, which deliver orders to custo-
mers. Individual customers are consumers in the platform mediated market as they
generate demand for the core product and valuable content by rating restaurants. The
platform provider itself offers not only a food delivery service, but also a food discovery
service through ratings and reviews.
Thus, the platform allows for both direct and indirect network effects that arise between
restaurants and customers. Joining the platform may increase demand for the restaurant’s
products among customers who use the platform. However, this decision carries with it an
increased risk that the restaurant may not be able to fulfill highly variable demand arising
from the platform, thereby adversely impacting its rating on the platform, and eventually,
its sales. The National Restaurant Association of India has published articles and reports
detailing other adverse effects of participating on food delivery platforms such as late and
missed deliveries, unhygienic delivery personnel, and decreased customer loyalty
(e.g., [38]).
We consulted several industry experts who provide services to a variety of restaurants.
We also consulted with individual restaurants that participate and do not participate on
the platform. The objective of this exercise was not to develop theory based on qualitative
data. Instead, we sought to gain deep insights into our context and our empirical results
wherever possible. Newspaper articles and industry whitepapers were analyzed to enhance
our understanding of the context. In-depth interviews with entrepreneurs and angel
investors in digital platforms facilitated a nuanced understanding of the platform context
(as the platform provider is a key stakeholder). The main data analyzed in this manuscript
is described next.
Data
The entire population of 95,735 restaurants located in the 37 largest cities of India is listed
on the platform.10 Several interesting observations can be made from the descriptive
statistics presented in Table A3 of Online Supplemental Appendix A. Restaurants serve an
average of two cuisines and hence 64% are multi cuisine restaurants. 27% of restaurants
serve only vegetarian food, 18% serve only Indian cuisines, and 11% serve alcohol. Finally,
the average price for a meal for two is 500 INR (around $7 US dollars). While these statistics
vary across the different cities, the mean value of rating does not deviate significantly.
Based on the interviews and research on the Indian economy [43], we chose to limit
our analysis to restaurants located in the seven major metropolitan urban
agglomerations.11 The reasons for this research choice are two-fold. First, non-
metropolitan India is demographically and socio-economically different from the seven
metropolitan cities. Average consumers in these towns have lower purchasing power and
different food habits as compared to residents of metropolitan cities. Accordingly, we find
that compared to the remaining 30 cities, the proportion of restaurants serving the low-
end of the price range (39% vs. 43%) or serving diverse cuisines (67% vs. 60%) is lower
and higher the seven metropolitan cities respectively. Second, in November 2017, food
delivery platforms were not very well established in non-metro India and hence many
restaurants were not listed on our platform. Arguably, the use of the platform in India
beyond the top seven metros was limited. On the contrary, all organized restaurants in the
seven metros are listed on the platform, thereby avoiding selection bias in the data. Thus,
focusing on the top seven metros serves as a key sampling criterion in our study.
Measures
Outcome of Interest
The purpose of this investigation is to inductively build multi-level theory for explaining
suppliers’ Platform Participation. We are interested in explaining an individual supplier’s
decision to participate on a digital platform and thereby digitize (a certain proportion of)
their business transactions. In our research context, restaurants can participate on the
platform by using it for facilitating delivery of food to their customers. This has led to
restaurants shifting marketing campaigns away from advertisements in traditional media
to digital advertisements in platform apps and websites [76]. Due to increased demand
originating from platform participation, some restaurants are also changing formats by
reducing dine-in space and increasing the size of their kitchens.
Supplier-Level Predictors
The restaurant’s Price Range was measured as the price of the meal for two persons,
categorized into three categories of high, medium, and low. This categorization was based
406 KATHURIA ET AL.
on discussions with several industry experts. Specifically, the price range for a restaurant
that offers a meal for two persons for 1000 INR and above (approximately, $15 U.S.
Dollars) was assigned a value of high. The price range less than or equal to 300 INR
(approximately, $4.5 U.S. Dollars) was assigned a value of low whereas the price range
between 300 and 1000 INR was considered medium.
Number of Cuisines was assigned a value of low if the restaurant offered a single cuisine,
medium if two or three cuisines were offered. A value of high was assigned if the
restaurant offered more than three different cuisines. Only Vegetarian was measured as
1 if the restaurant was a pure vegetarian restaurant, otherwise a value of 0 assigned to this
predictor. Similarly, if the restaurant provides only Indian food (as opposed to interna-
tional cuisines), it is captured using a dummy called Only Indian (value of 1 was assigned
to this predictor if the restaurant serves only Indian food, otherwise a value of 0 was
assigned to this predictor). Serves Alcohol was measured as 1 if the restaurant serves
alcohol, and 0 if otherwise. Offers Parking was assigned a value of 1 if the restaurant
provided any (paid, free or valet) parking services, and a value of 0 if no parking was
provided. On-Premise Features was measured as 1 if the restaurant provides features such
as live entertainment, music or telecasts live sporting events, otherwise a value of 0
assigned.
Supplier-Level Digital Readiness Predictors

Uses e-Wallets was assigned a value of 1 for restaurants that accept payments digitally by
using e-wallets, otherwise a value of 0 assigned to this predictor. Offers Wi-fi Access was
measured as 1 if the restaurant provides its customers with free Wi-fi internet access,
otherwise this predictor was assigned a value of 0.
Institutional-Level Predictors
Based on discussions with industry experts, we assigned Number of Outlets a value of high
if nine or more other restaurants had the same name as the focal restaurant. A value of
medium is assigned if at least one other restaurant, and less than nine other restaurants,
shared their names with the focal restaurant. If the restaurant’s name was unique, low
value is assigned.
Platform-Level Predictors
A restaurant’s rating was recorded on a 5-point scale at our research site. Certain
restaurants did not have ratings and such restaurants were excluded from our analysis.12
We transformed ratings from their numeric value to three categories of high, medium and
low as follows. A restaurant is coded to have high rating when its rating is greater than or
equal to 4. A restaurant is coded to have low rating when its rating is less than 3.
A restaurant with a rating greater than or equal to 3 and less than 4 was recoded to
have medium rating.
Competition-Level Predictors
To construct our competition-level predictors, we first created measures of spatial con-
centration. To do so, we acquired the location of each restaurant in our dataset. We then
represented them in space according to their latitudes and longitudes.13 We calculated
distance between all pairs of restaurants within a city using Euclid’s formula. To account
for the curvature of the earth, prior studies calculate distances using spherical geometry
[79, 82]. However, Euclid’s formula yields accurate calculations of the distance between
two locations over the small distances relevant to our study. Finally, we calculated the
spatial concentration of competition for a restaurant as the number of restaurants14 that
lie within 1-kilometre distance of the focal restaurant.
Competition Concentration was measured as high/medium/low values to represent
high/medium and low competition. We assigned a value of low to this variable if the
number of competitors (spatial concentration of competition) was less than 9, medium if
the number of competitors was between 10 and 99 (both inclusive) and high if the number
of competitors was greater than or equal to 100. To measure Participant Concentration, we
calculated the proportion of competitors, within the total number of competitors in the
neighborhood cluster that have chosen to participate on the platform. The variable was
assigned a value of high if the number of platform participants in the cluster was greater
than 99. This variable was assigned a value of medium if the number of platform
participants in the cluster was between 10 and 99, inclusive of both numbers. Finally,
a value of low was assigned if the number was less than 10.
Environment-Level Predictors
Market Maturity was assigned value of high for restaurants based in Mumbai, Delhi,
Chennai and Kolkata, and low for other three newer metros. Recent growth of the IT
industry has fueled rapid growth in the three newer metros of Pune, Bangalore and
Hyderabad. Therefore, restaurants in the four older, mature metros (Mumbai, Delhi,
Chennai and Kolkata) are likely to be systematically different with regards to their
propensity to participate on digital platforms compared to restaurants in the three
newer metros (Pune, Hyderabad, and Bangalore). These macro-level environmental (con-
textual) differences were captured through this measure.
Multi-Level Theorizing with Decision Tree Induction

Tree induction is a data-driven methodology for discovering analytics and patterns from
data [65, 66]. The process of induction and knowledge discovery is an art which yields
easy-to-interpret rules which shed light on tacit decision rationale embedded in data and
help make informed inferences about managerial decision making [4]. This makes this
methodology accessible to a variety of stakeholders including managers, top management
executives and policy makers (e.g., [39, 47]). Insights gained from using this analytics
methodology are intuitive to stakeholders as the discovered knowledge is articulated in the
form of a tree of if-then rules (this will be clear later when we extract rules from the
decision trees induced on our data) that compactly represent cumulative influences on
outcomes. Trees are effective at shining the light on the tacit and emergent interconnec-
tions between predictors that are important (as these are the only predictors deemed
informative by the induction algorithm and are chosen to be included in the decision tree)
and not necessarily known ex ante [47, 50]. Also, the tree induction algorithm (we discuss
specifics of the C4.5 algorithm used in this study later in this manuscript) makes few
distributional assumptions about the data making this methodology more applicable and
generalizable [65, 66].15 Tree induction can thus serve as an important methodological
framework to study organizational designs and decision making [36, 49] and has been
408 KATHURIA ET AL.
used extensively for such purposes (e.g., [17, 62]). Decision trees have been used by
Information Systems (IS) researchers in the past in various contexts such as financial
decision making [85], operational decision making [62], security breaches [92], and more
recently for IT portfolio management [39]. Table A4 in Online Supplemental Appendix
A provides exemplars of IS studies that utilize decision trees.
Data Partitioning and Induction of Trees

A key practice associated with theory building using tree induction is data partitioning
[95]. The essence of data partitioning and creating (mutually disjoint, non-overlapping)
training and validation partitions lies in demonstrating generalizability of knowledge
discovered by induction. Knowledge, represented in the form of trees, is learned from
the training partition and is validated on unseen data. In other words, knowledge
discovered from the training data is considered generalizable only if it accurately predicts
on unseen data (contained in the mutually disjoint, non-overlapping validation data
partition) [85].
Building on the idea of partitioning, is a testing mode called n-fold validation, where
the data is divided into n partitions and n-1 partitions are used as the training subsample
and one partition (or fold) is used for validation. 10-fold validation, used in this investiga-
tion, is one of the most popular testing modes for theory building using induction [39].
An additional pitfall with analytics is that data scientists (inadvertently) over-fit their
models and end up explaining noise in their data (as opposed to the key, underlying
relationships of interest). We take the necessary precautions and not fall into the over-
fitting trap by testing prediction accuracy on the validation data partition [26].
After data partitioning, two key steps define the tree induction analytics methodology.
First, the C4.5 induction algorithm is used to grow the tree on training data [65, 66].
Secondly, the tree grown in step 1 is pruned by validating it with unseen data from the
validation partition. In doing so, we are able to easily discover the tacit structure of the
data and demonstrate robustness of the discovered knowledge. Weka, a popular, open-
source tool is used for data partitioning, and for growing and pruning trees [26].
The C4.5 algorithm relies on the concept of purity and utilizes informative attributes to
recursively partition the training data to reduce impurity in terminal nodes. In particular,
entropy is chosen as the impurity measure in this research investigation, as entropy is easy
to interpret for a two-class decision problem (our decision problem of platform participa-
tion is a two-class problem). The basis for entropy reduction lies in the mathematical
theories of communication [75]. Tree induction iteratively groups together observations
(i.e., restaurants, in this case) such that they are similar not only in certain information
attributes (i.e., the predictors from Table A2 of the Online Supplemental Appendix A) but
also similar in terms of their platform participation outcomes. There are two key inputs to
tree induction: (1) a set of restaurants described by all the information attributes, and (2)
the platform participation decisions made by these restaurants.
The objective of tree induction is to discover tacit combinations of information
attributes associated with similar final outcomes (similar platform participation decisions,
in this case) [65]. The output of tree induction is a tree which only retains the most
pertinent information attributes (i.e., decision attributes) for explaining decisions. Tree
induction organizes attributes in a context-dependent manner; certain questions are only

raised depending on answers obtained to other questions answered previously [66].
The use of the prediction accuracy of the decision tree as the sole criterion when choosing
the best representative tree (among alternative models) can be misleading and would be akin
to falling into the overfitting trap. We avoid overreliance on the prediction accuracy by
holistically considering two other heuristics, namely communicability (parsimoniousness)
and structural consistency (stability) of the discovered knowledge. In summary, three heur-
istics, (1) prediction accuracy, (2) parsimoniousness, and (3) overall stability of the discovered
knowledge, collectively guide the choice of the best representative tree.
We would like to clarify that trees discovered by induction are not reflective of the
exact rules or the “script” used by the decision makers at restaurants, but rather, are
credible approximations of the tacit underlying decision rationale [4]. Tree induction
utilizes the most informative predictors to construct the tree. Instead of the correlations
between information predictors, induction relies on the amount of information
a particular predictor conveys about the final decision outcome (see Figures A1 to A4 in
the Online Supplemental Appendix A). Thus, we do not report correlations between
information predictors.
Table 1 summarizes results of computational experiments from Phase 1 of theory
development. We generated alternative models by changing the values for two key
parameters which control the overall degree of pruning and the minimum number of
instances at leaves. In Phase 1, we included supplier-level, platform-level and environ-
mental predictors. The entire collection of fourteen predictors was used to model the
platform participation decision of suppliers in Phase 2 of theory development. Such
Table 1. Computational experiments to select best representative tree.

Mechanisms to Detect Overfitting Three Key Heuristics to Choose the Best Representative Model
ACCURACY
COMMUNICABILITY CONSISTENCY Prediction Error
Degree of Minimum Instances at Size of Tree Top two levels of (Validation
No. Pruning Leaves (# of leaves) Decision Attributes Data)
1 Low 100 25 1: Price Range 26.57%
2: Uses e-Wallet, Serves Alcohol
2 Low 200 22 1: Price Range 27.55%
3 Low 500 16 1: Price Range 27.86%
4 Medium 100 19 1: Price Range 27.72%
2: Uses e-Wallet, Number of
Outlets
Outlets
Outlets
7 High 100 12 1: Price Range 27.81%
Outlets
Outlets
410 KATHURIA ET AL.
a staged approach to theory development is critical as the competition-based variables

make key assumptions that need to be incrementally considered.16 Tree 9 from Table 1 is
presented in Figure 1. We choose a decision model with marginally higher error rates
since it is parsimonious. We rank this decision model as having highest communicability.
Next, we highlight key findings from this best representative model.
Selecting the Best Representative Tree

To ensure that decision rationale is comprehensively discovered, a process of drawing
mutually exclusive training and testing subsamples is repeated multiple times. In each
iteration, we draw two random, mutually exclusive subsamples of restaurants from the
original data; one set, known as the training set, from which the tacit decision rationale is
discovered by the C4.5 induction algorithm [65], and another disjoint set of initiatives,
known as the testing set, which is used to test the predictive accuracy of this discovered
rationale. Specifically, we used 10-fold validation where the full sample is divided into 10
partitions, of which nine partitions are used for building the tree and the last partition is
used for validation. Prediction accuracy of the tree discovered from the training set is
assessed by applying the rationale to predict decisions for restaurants from the unseen
data, namely data in the mutually disjoint testing set.
Multiple approximations of the underlying, tacit rationale are derived by repeating
computational experiments where the 10-fold validation process in repeated at varying
levels of pruning. This is integral to the tree induction methodology to ensure that
Figure 1. Tree One: Decision journey for platform participation.18

multiple approximations of the underlying tacit decision process are available to the
researchers. Given these multiple approximations, we rely on three heuristics to select
the best representative, credible, approximation of the underlying tacit decision process.
(1) High predictive accuracy: Prediction accuracy of trees induced on the training data
is tested on a mutually disjoint validation data set. This heuristic represents
a goodness-of-fit measure for the tree induced on the training dataset in terms of
predicting decisions from unseen data.
(2) High parsimony: The induced tree is expected to be a parsimonious approximation
of the underlying decision rationale so that it can serve as an effective decision- and
policy-making aid.
(3) High reliability: Since the process of drawing training samples to induce trees and
testing the predictive accuracy of induced trees on mutually disjoint validation
samples is repeated several times, we can assess the robustness of the discovered
knowledge. In this case, all the trees induced on the data contained the same top-
most attribute, showing up reliably across these multiple iterations, thereby repre-
senting a robust approximation of the underlying decision rationale. We are, thus,
certain that the trees presented in this research are credible approximations of the
restaurants’ tacit platform participation decision process.
Results
Trees presented in this manuscript that were discovered by the tree induction C4.5
algorithm, are not the exact rules or “a scripted rulebook” that decision makers at
restaurants use. Instead, they are approximations of the underlying structure of the data
(an approximation of the tacit decision process that restaurants undergo when deciding
whether to participate on the platform or not). The trees yield context-specific rules that
clearly articulate the emergent connections across levels to inform the participation
question and therefore constitute part of our multi-level theory. Ergo, the trees are an
artifact of the theory.
All the 14 information attributes characterizing initiatives (see Table A2 in Online
Supplemental Appendix A) in conjunction with the final platform participation decision,
are inputs to tree induction. All information attributes discovered by tree induction to be
most informative for explaining platform participation decisions are included in the trees
as decision attributes and the tree induction C4.5 algorithm excludes all the non-
informative attributes from the tree. The most informative decision attribute is the top-
most attribute in the tree. Importance of attributes decreases as we move away from the
top of the tree to its leaves.
Key Findings from Phase 1

Rules 1 and 2, presented in Table 2, are the top two rules that predict platform participa-
tion, while rules 3 and 4, are the top two rules that predict contingencies when restaurants
choose not to participate on the digital platform. These rules align with insights gained
from extensive interactions and interviews we conducted with industry experts and
restaurant owners
412 KATHURIA ET AL.
Table 2. Top context-specific rules discovered from decision tree induction.

Extraction Levels Instances
No. Rule Stage Incorporated Decision Classified
1 The Middle Way
Price Range = “Medium” Tree 1 Supplier Participate ~ 25,000
Tree 2
2 The Low-end Meat Corner
Price Range = “Low” and Tree 1 Supplier Participate ~ 6,300
Use e-Wallet = “No” and Supplier Digital
Only Vegetarian = “No” Supplier
3 The Upscale Bar
Price Range = “High” and Tree 1 Supplier Do not ~ 4,000
Serves Alcohol = “Yes” Supplier participate
4 The Non-Metro Vegetarian
Price Range = “Low” and Tree 1 Supplier Do not ~ 2,300
Uses e-Wallets = “No” and Tree 2 Supplier Digital participate
Only Vegetarian = “Yes” and Supplier
Market Maturity = “Low” Environmental
5 The Average Performing Meat Corner
Price Range = “Low” and Tree 2 Supplier Participate ~ 4,400
Uses e-Wallets = “No” and Supplier Digital
Only Vegetarian = “No” and Supplier
Rating = “Medium” Platform
6 The Upscale Sports Bar Chain
Price Range = “High” and Tree 2 Supplier Do not ~ 500
Serves Alcohol = “Yes” and Supplier participate
Number of Outlets = “Medium” and Institutional
On-premise Features = “Yes” Supplier
The Middle Way Rule

Majority of restaurants in the medium price range have digitized their business transac-
tions by choosing to participate on the platform. This was the main classification rule
extracted from the tree as it classified the largest majority of restaurants (greater than
25,000 restaurants) in the training subsample. The general form of this rule is suppliers
with medium priced offerings choose to participate on digital platforms that facilitate
repeated, low value, and novel transactions.
The Low-End Meat Corner Rule

Restaurants in the low-price range, that are not “vegetarian only” restaurants, that lack the
digital readiness (since they do not use e-wallets to accept payments), have chosen to
participate on the platform, arguably to broaden their customer base. This rule cautions us
to not paint all digital-enabled choices with the same broad brush. In this case, lack of
digital readiness is not preventing these suppliers from participating on the digital plat-
form. The general form of this rule is suppliers with low priced and generic offerings, having
low digital readiness, choose to participate on digital platforms that facilitate repeated, low
value, and novel transactions.
The Upscale Bar Rule

High priced restaurants that serve alcohol have chosen not to participate on the digital
platform. This is an intriguing finding with strong governance and policy implications.
Participation on the digital platform enables suppliers to digitize at least a part of their
business transactions. Digitizing business transactions generates an online trail with strong
governance and monitoring implications [56]. Arguably, not choosing to leave a digital trail
is a strategic choice made by several high-end restaurants. Additionally, many up-scale bars
invest heavily in developing a compelling and memorable dining-in experience for their
customers [61]. Participating on a delivery platform could cannibalize their dining-in sales or
dilute their value proposition and impede their ability to charge an “experience premium.”
The general form of this rule is suppliers with high priced and additional offerings choose not
to participate on digital platforms that facilitate repeated, low value, and novel transactions.
The Non-Metro Vegetarian Rule

As can be seen from the extracted rule, we find that low-priced, vegetarian restaurants, in
the newer three metros (Pune, Hyderabad and Bangalore) that do not accept payments
through e-wallets have chosen not to participate on the digital platform. In this case, lack
of digital readiness is in alignment with the lack of participation on the digital platform.
The general form of this rule is suppliers with low priced and focused offerings, located in
nascent markets, having low digital readiness, choose not to participate on digital platforms
that facilitate repeated, low value, and novel transactions.
Key Findings from Phase 2

In the second phase of theory development, we included all the 14 predictors listed in
Table A2 of Online Supplemental Appendix A, including two competition-level predic-
tors, namely the number of competitors in the cluster and the number of competitors in
the cluster who are participating on the platform. This key step in the theory development
process enables us to judge the relative importance of these information attributes which
are likely to be not (accurately) known to the managers at the focal firm. Computational
experiments, like the ones articulated in Table 1, were conducted and the best represen-
tative tree from this phase in the theory development is presented in Online Supplemental
Appendix B. The prediction accuracy of all these decision models was similar. The
robustness of these decision models was high and comparable. Thus, we relied on the
last heuristic, communicability, to choose a best representative. We chose a decision tree
with level two attributes similar to the ones from the tree chosen to represent theory
building from phase 1 as this enhances the communicability of the findings from phase
1.17 Overall, comparing the best representative decision tree across the two phases of
theory development, we find that we have discovered robust knowledge as the top
classification attribute in both the trees is the same. Furthermore, the main decision rule
in the two trees is also the same and is presented as rule 4 in Table 2. Thus, we have
demonstrated that over these two steps of theory development, we have discovered
knowledge that consistently helps us explain restaurants’ platform participation decisions.
Moving from phase 1 to phase 2 of theory development, we learn how all the predictors
from various theoretical traditions fit together to provide nuanced, albeit context-specific,
explanations (see Figures B1 and B2 in Online Supplemental Appendix B) for restaurants’
platform participation decisions. The number of competitors in the cluster is not included
in the decision tree, whereas the number of competitors who have participated on the
platform has a bearing on a given restaurants’ decision to participate on the platform.
Thus, though proportion of restaurants that participate on the platform has an influence,
this decision attribute is at lowest level attribute in the tree and thus its relative importance
414 KATHURIA ET AL.
is low. Along similar lines, though platform rating is present in the decision tree grown in
phase 2, this decision attribute is also at lowest level attribute in the tree and thus its
relative importance is also low. We observe that the top-most classification attribute
continues to be price range and the main rule (rule 4 in Table 2) is also the same where
a large majority of restaurants in the low price range have chosen to participate on the
platform. This is strong evidence supporting the discovery of robust knowledge across the
two phases of theory development in our research. The decision rule (rule 5 in Table 2)
that classifies the second greatest number of instances is presented next. The last rule we
find (rule 6 in Table 2) is offered in the subsequent section.
The Average Performing Meat Corner Rule

More than 4,400 restaurants in the low-price range, that serve meat, do not use digital
wallets to accept payments, with medium ratings are participating on the platform.
Additionally, more than 1,900 restaurants in the low-price range, that serve meat, do
not use e-wallets to accept payments, with low ratings are participating on the
platform. In summary, more than 6,300 restaurants in the low-price range, that
serve meat, do not use e-wallets to accept payments, with low to medium ratings are
participating on the platform. The general form of this rule is suppliers with low priced
and generic offerings, having low digital readiness, and low to medium ratings choose to
participate on digital platforms that facilitate repeated, low value, and novel
transactions.
The Upscale Sports Bar Chain Rule

Restaurants in the high price range, that serve alcohol, with a medium number of
(chain) outlets that provide features that encourage customers to visit their restaurant
(e.g., live music and entertainment, telecasting of sporting events) do not participate on
the platform. The general form of this rule is suppliers with high priced and additional
offerings, belonging to an institutional group, having high resource endowment, choose not
to participate on digital platforms that facilitate repeated, low value, and novel
transactions.
Discussion
Theoretical Implications of Rules
Our findings resonate with the debate in competitive strategy on hybrid strategic profiles.
Porter [64, p. 17] explains this phenomenon as “a firm’s unwillingness to make choices
about how to compete … it tries for competitive advantage through every means and
achieves none.”19 In our study, firms with certain pure strategic profiles, may or may not
participate on the platform. For example, high-priced restaurants that offer “On-Premise”
features can be interpreted as following a pure differentiation strategy. These restaurants
do not participate on the platform (the Upscale Sports Bar Rule). Similarly, low-priced
restaurants that offer both vegetarian and non-vegetarian food can be interpreted as
having a pure strategic profile of a cost leadership strategy. These restaurants with high
ratings do not participate on the platform. Additionally, low-priced restaurants with low
or medium ratings (performance) make the choice to participate on the platform (the
Average Performing Meat Corner Rule). However, firms in our study regularly combine
multiple strategies. Thus, several types of restaurants can be interpreted as following
hybrid strategic profiles. For example, low-priced, vegetarian restaurants that serve
a single cuisine can arguably be interpreted as having a hybrid strategic profile of cost
leadership, focused, and differentiation strategies. Such restaurants both participate as well
as do not participate on the platform, contingent on other competitive and institutional
factors. This implies that the strategic profile of suppliers alone is not sufficient to predict
platform participation and it is necessary to explain this complex choice by incorporating
other predictors from other theoretical perspectives. Thus, we need to treat the strategic
choice of platform participation as a contingency adopted by suppliers having hybrid
strategic profiles.
We also contribute towards institutional theory, which describes institutional iso-
morphism as the tendency of an organization to imitate other organizations, especially
when faced with new and uncertain phenomena with high risk [15, 16]. Specifically,
“when technologies are poorly understood and when goals are ambiguous, or when the
environment creates symbolic uncertainty, firms tend to model themselves after simi-
lar firms in their field that they perceive to be more legitimate or successful” [16,
p. 157]. We find that low-priced, vegetarian restaurants, offering a medium number of
cuisines, located in mature markets (namely Mumbai, Kolkata, Delhi, and Chennai)
tend to imitate competitors regarding platform participation. Thus, institutional iso-
morphism, while important, is only relevant for suppliers under specific contingencies
(focused cost leadership) in our context (Figures B1 and B2 in Online Supplemental
Appendix B).
Our results have implications for literature that predicts winner-take-all outcomes
for platform providers who can “tip the market” by having maximum users. Tipping is
the “ability of platforms to shape market dynamics by gaining control over an installed
base to win platform competition” [10]. Tipping is thus an imperative for platform
providers and drives “get-big-fast” strategies [19]. Our context does not favor condi-
tions under which winner-take-all outcomes are salient given low multi-homing costs
and high demand for differentiated features [25]. Incorporating our findings regarding
the geographic concentration of participating suppliers (seen in Figure B2 of Online
Supplemental Appendix B) into our observations on isomorphism across suppliers with
similar strategic profiles, along with the absence of rating as a determining factor for
participation, we suggest that supplier-level effects that drive various forms of iso-
morphism could plausibly lead to winner-take-all outcomes. This interaction of pre-
dictors across various theoretical levels and theory bases is a fundamentally different
mechanism for achieving critical mass in the absence of rigid lock-in. Furthermore, our
results broaden the work by Cennamo and Santalo [10] and others that demonstrates
potential conflicts between strategies used by platforms and hence contingencies to the
unconditional winner-take-all logic. Our findings, in the context of a non-exclusive
platform with minimal ability to lock-in suppliers though traditional means, suggest
alternate mechanisms to drive and lock-in participation. We find evidence for compe-
titive, institutional and strategic isomorphisms. These could coalesce and drive winner-
take-all outcomes despite the absence of prior demonstrated antecedent factors.
Most significantly, we contribute toward the broader literature on platform partici-
pation by establishing a set of boundary conditions on the extent to which suppliers
416 KATHURIA ET AL.
participate on platforms that offer repeated, low value, and novel transactions. These
findings enable us to sustain the conversation on the Matthew Effect — the rich get
richer and the poor get poorer — in platform participation by providing counter-
intuitive findings. Per prior literature, suppliers that are highly successful or have
idiosyncratic capabilities (such as high levels of innovation, intellectual property rights
or downstream commercialization capabilities) are more likely to join a platform
ecosystem [9, 35]. In our context, suppliers that are successful (have high ratings) or
have other commercialization capabilities (serve alcohol or offer on-premise features)
do not participate on the platform. We find that 205 low-priced, non-vegetarian serving
restaurants with high ratings choose not to participate on the platform. Similarly, 505
high-end, alcohol serving restaurants with medium or high ratings do not participate
on the platform. On the other hand, suppliers who have low ratings may also choose to
not participate on the platform. More than 2,000 low-priced, meat serving restaurants
with low ratings do not participate on the platform that we studied. Thus, our results
have important implications for platform emergence and growth.
Abducting Theoretical Propositions

Building on the context-specific rules induced through decision tree induction, we now make
the journey to generic explanations facilitated by abduction. For example, when discussing the
hiring of employees in firms, Pentland [60] argued that an observation enables story telling
from the point of view of a specific stakeholder. Abducting away from a specific new
employee’s perspective, a fabula can serve as the basis for generic propositions which reveal
the underlying structure to a set of events and their interrelationships in terms of who did
what and how people in general are hired. Along similar lines, in this study, we make
observations relying on the context-specific rules extracted from the best representative tree.
In this third phase of theory development, we abduct away from these specific observations to
uncover the underlying structure of interrelationships of predictors across levels. We articu-
late four generic propositions for supplier participation on platforms that offer repeated, low
value, and novel transactions, which broaden the generalizability of our research.
First, we considered the entire repertoire of context-specific rules and the theoretical
levels and predictors they encompass. As seen in Table 2, we observe several instances of
rules with predictors across various levels. Abstracting away from this observation, we
offer our first proposition as shown in Table 3.
Second, we compared and contrasted context-specific rules that collectively explain
participation and non-participation. We observed several rules explaining platform parti-
cipation with various predictors and many other rules that explain platform non-
participation with non-overlapping sets of predictors. Abducting away from these two
observations, we develop our second proposition as shown in Table 4.
Table 3. Observations and Theoretical Proposition 1.

Observation Predictors of participation in food delivery platforms lie at the Platform, Supplier-, Supplier Digital-,
Institutional and Environmental levels.
Proposition P1: Predictors informing supplier participation on platforms facilitating repeated, low value, and novel
transactions are present across multiple levels of analysis.

Observations Predictors of participation in food delivery platforms are Price Range, Use e-Wallet, Only Vegetarian, and
Rating.
Predictors of non-participation in food delivery platforms are Price Range, Uses Wallet, Only Vegetarian,
Market Maturity, Serves Alcohol, Number of Outlets, and On-Premise Features.
Proposition P2: The combination of predictors informing supplier participation on platforms facilitating repeated, low
value, and novel transactions is different from the combination of predictors of non-participation in such
platforms.
Next, we scrutinized the interrelationships among predictors across various levels. We

observed that certain predictors only become relevant for explaining platform participa-
tion or platform non-participation, based on values of other predictors. Abducting away
from these observations, we develop our third proposition in Table 5.

Observations Serves Alcohol (Supplier-level) is a significant predictor of participation in food delivery platforms only
when the value of Price Range (Supplier-level) is high.
Market Maturity (Environmental-level) is a significant predictor of non-participation in food delivery
platforms only when the values of Price Range (Supplier-level), Uses e-Wallet (Supplier Digital-level), and
Only Vegetarian (Supplier-level) are low, no, and yes respectively.
Proposition P3: For predictors informing supplier participation or non-participation on platforms facilitating repeated, low
value, and novel transactions, the values of predictors of at one level influence the inclusion or exclusion of
predictors at the same or other levels.
Finally, given multiple contingencies, a few predictors could have a strong, dominating
influence and, almost operate in isolation. Alternatively, multiple contingencies could also
combine to have a reinforcing influence on outcomes [23]. We made two observations
along these lines. Abducting away from these observations, we uncover two types of
underlying interrelationships between predictors at multiple levels.

Observations For participation in food delivery platforms, Price Range is a dominant predictor
For participation in food delivery platforms, Rating, Number of Outlets, and On-premise Features are
reinforcing predictors
Proposition P4: Multiple predictors informing supplier participation on platforms facilitating repeated, low value, and
novel transactions may interact such that either a few predictors dominate or reinforce in their combined
influence on platform participation.
In summary, by making systematic observations, our abductive approach facilitates the

journey from context-specific rules to generic explanations in the form of propositions. In
doing so, we build on prior exemplars of theory building with multiple contingencies20 (e.g.,
[70]) and leverage multi-level theorizing to shed new light on supplier participation on digital
platforms.
Theoretical Contributions
In addition to the theoretical implications of the decision rules, this manuscript makes
three other strong contributions to theory. First, trees represent theories in a holistic and
easy to interpret manner. They sort and organize predictors based on their relative
importance on multiple levels. Only informative predictors are included in the tree,
whereas non-informative predictors are excluded. This initial level of sorting enables
418 KATHURIA ET AL.
researchers to focus their attention on the predictors deemed informative. Additionally,

trees organize predictors based on their relative importance. Thus, the partial ordering of
predictors in a tree are important as they are reflective of decision flows and summarize
the journey and experiences of the decision-makers. Furthermore, rules extracted from
our decision trees reveal ontologies or sets of concepts and categories in a domain that
reveal their properties and the relations between them. Thus, this manuscript showcases
the ability of decision trees to enlighten first principles, or “the essence of things,” thereby
representing a major contribution to theory.
Second, this manuscript demonstrates the use of abduction as logic for theory development.
Deduction and induction are more frequently used for logical conclusion. Deduction proceeds
from a known rule, or context of features, and seeks to find the rule in the data, in order to obtain
a result, or knowledge, about a case [68]. For example, a rule “all the beans in this bag are white”
for a case “the beans from this bag are white” leads to the result “these beans are white” [59].
Induction consists of starting from a case, and extending a result from the data, into a rule; for
example, a case “the beans are from this bag” with the result “these beans are white” leads to the
rule “all the beans in this bag are white” [59]. Abduction is inference to the best explanation [34].
Here, the result “these beans are white” with the inferred rule “all the beans in this bag are white”
leads to the case “these beans are from this bag” [59]. Extracting rules from trees enabled us to
develop theoretically nuanced explanations and progressively refine our theoretical predictions.
By abstracting away from multiple instantiations of the rules, we examine the rules in their
abstract forms. This higher level of abstraction enables us to progressively develop and refine our
theoretical propositions (and our predictions). Note that we are not interested in the actual
instantiations of the rules. Instead, we attempt to discover how abstractions progressively evolve
to an ontology of these rules. This progressive theory development through abduction reveals the
intricate combinations of predictors and clarifies the combined influence of combinations of
predictors on the outcome of interest. In other words, we leverage abductive discovery to proceed
from the result in the data (two trees) to rules (six context-specific rules and their general forms)
to finally arrive at cases (four generic propositions) [68]. Herein lies our second significant
contribution.
Third, we demonstrate an alternative means for developing multi-level theory that
reveals sequences of insights. Extant efforts at multi-level theory building have used
hierarchical linear modelling (e.g., [51, 83, 97]), multi-stage econometric models (e.g.,
[94]), or non-parametric methodologies (e.g., [71]) to examine phenomenon between and
across two levels of analysis. Our distinct methodological contribution lies in our articula-
tion of sequences of combinations of predictors that lie across five levels of theory, that is,
supplier-, institutional-, platform-, competition-, and environment-levels. The order in
decision tree induction goes beyond mere outcomes by explicitly representing these
sequences, where the partial ordering of decisions matter.
Overall, this manuscript moves IS scholarship forward by presenting an alternative
form of knowledge production that emphasizes “inductive, rich inquiries using innovative
and extensive data sets” and enables “novel, genuine, high-level theorizing around ger-
mane conceptual relationships” [24]. Our data-driven, inductive-abductive research inter-
prets patterns in the data to discover empirical regularities (stylized facts) that challenge
our existing beliefs and give rise to potentially new constructs and theories [29]. As Weick
[93] notes, novel theories require application of diverse lenses to examine phenomena,
keen observation of data, a disciplined imagination, and thought experiments. This
manuscript presents an alternate lens that can enable IS theorists to develop rich theory by
seamlessly moving through various levels of abstractions to discover new knowledge and
ontologies and identify inter-relationships across facts [24].
Implications for Practice

This study investigates platform participation from the vantage point of suppliers (restau-
rants). Thus, the implications of our findings for practice are two-fold. First, for platform
participants, we offer a nuanced view into the decision-making process of their competitors
regarding participation in platforms facilitating repeated, low value, and novel transactions.
Specifically, we help suppliers identify which other suppliers are participating on the plat-
form, which are not, and arguably, why they are doing so. These insights provide mechan-
isms for rational decision-making by managers regarding platform participation. Second, for
platform providers, we identify organizing principles for their platforms by highlighting the
most efficient path for increasing participation in their platforms and thus growing their
installed base. Directly following from rules 1 and 2 in Table 2, our findings collectively
imply that platform providers should first focus upon the Middle Way, i.e. suppliers
(restaurants) that offer medium-priced offerings (meals), as these are most likely to parti-
cipate on such platforms. Secondary focus should be paid to suppliers (restaurants) that
offer low-priced, focussed offerings (non-vegetarian meals). By seeding these two major
segments of participants, platforms can get-big-fast. Our practice implications also extend to
other contexts of non-exclusive platforms that facilitate repeated, low value, and novel
transactions, such as platforms for sharing rides, household services, and workspaces.
Implications for Policy

This study has significant implications for policy makers who wish to increase participa-
tion in digital platforms facilitating repeated, low value, and novel transactions, due to
their ability to enhance quality of life, increase economic efficiency and improve public
welfare. Our findings imply that policy incentives should be provided to suppliers at the
lower and higher ends of the pricing spectrum to participate on such platforms.
Furthermore, policy should be designed to encourage platform providers to focus on
specific categories of potential participants (e.g., middle-priced) to ensure large-scale
diffusion of these platforms. Most importantly, our findings shed light on transparency
as an important contingency in this process. A by-product of participating in these
platforms is increased transparency of at least a small proportion of business transactions.
This may be the reason why restaurants that serve alcohol are more likely to not
participate on delivery platforms. This act of strategic omission is a ripe opportunity for
policy interventions. Further, policy to encourage platform participation in such contexts
can only be successful if complementary policies are crafted to include appropriate
incentives and punitive measures to encourage transparency of business transactions.
Strengths and Limitations

This research has several strengths. We use a population level dataset to systematically
examine restaurants decision to participate in the delivery services of a digital platform.
420 KATHURIA ET AL.
This research setup addresses potential sample selection concerns as both participating
and non-participating restaurants are part of the dataset. This comprehensive dataset
enables us to contribute unique insights on platform participation, especially in the
newer, emerging economies. Second, the decision tree induction methodology used in
this study also enables us to contribute unique insights by discovering key patterns in the
data and present the analytics in a manner that is intuitive and easy to follow for a wide
variety of stakeholders. Critically, the methodology is appropriate for inferring a fit (or
a lack of fit) between what managers are expected to do (in theory) and what they actually
do (what the trees reveal), making it appropriate for presenting to managers and policy
makers [17]. Third, decision tree induction methodology has a low rate of false positive
predictions [80]. Thus, our prediction error of 28% while low is also conservative in
nature. Finally, a key strength of this paper lies in the use of decision tree induction to
realize a new ontology, which is a portent of future research advances. This methodology
offers a perspective that aligns with current trends in artificial intelligence such as
semantic networks and cognitive computing [13], which require explicit representation
of extensive knowledge about the world [11, 12, 20]. Decision trees create ontologies that
can be used to further derive semantics and knowledge representations. Ontologies are
therefore the pillars of the semantic web and enable us to understand first principles, or
“the essence of things.” If organizations are conceived as bundles of decisions that can be
dynamically allocated across humans, systems, or combinations of humans and systems,
decision trees represent the first, vital step toward achieving cognitive reapportionment and
autonomous decision-making [46]. Eventually, decision trees, could credibly approximate
the decision processes and governing dynamics pertinent to management practice.
Our study suffers from certain limitations. First, decision trees are an approximation,
albeit credible, of the decision-making process tacitly followed by suppliers. Though we
conducted follow-up interviews with restaurant owners/managers to ascertain the validity
of our results, we are unable to precisely quantify the exact order of steps taken by
managers in the decision process for platform participation. Second, generalizability of
our results to other types of platform participants or other types of platforms may be
limited. Nonetheless, the large potential size of the online food delivery market in India
specifically, and the growth potential of digital platforms that facilitate repeated, low value,
and novel transactions in general, implies that despite limited generalizability, our theory
explains a significant phenomenon. Third, the cross-sectional nature of our data precludes
us from drawing causal conclusions through our analysis. Due to the turbulence and
external shocks witnessed in this market, and ongoing changes to the platform’s govern-
ance and technology,21 it is not feasible to gather and study longitudinal effects in this
context. However, this is an interesting scope for future research studies, perhaps in other
contexts.
Directions for Future Research

We identify three avenues for future research. First, our research methodology leverages
induction to discover rules explaining platform participation of suppliers. Rules serve as
the primary input to the abduction process. Our methodology thus serves as a harbinger
for cognitive computing whereby artificial intelligence systems can mimic the functioning
of the human brain and help to improve human decision-making by inferring the best
explanation given a set of rules. By mapping decision journeys, we take a step further
towards this goal. Decision tree-based abduction, which helps define ontologies and
construct decision journeys and flows, is thus a stepping stone toward a deeper under-
standing of decision-making by groups of human agents (stakeholders) in complex
situations. Future research for automating this intellectual jump from rules to cases, or
inference to the best explanation, is a foundational feature to realize the dream of
cognitive computing.
Second, in this study, we studied platform participation from the point of view of
suppliers. Moving forward, future research could contrast similar questions from the point
of view of consumers. In particular, we find that ratings do not significantly influence
restaurants’ platform participation decision. This finding makes sense given that suppliers
themselves know their true quality and arguably a performance indicator like a supplier’s
rating is more important only in the eyes of other stakeholders such as consumers who are
looking for a mechanism to separate good quality suppliers from bad ones.
Third, in this study we considered only two competition-level predictors, namely
competition concentration and participant concentration. Further refinements to these
competition measures can shed light on nuanced theoretical explanations. For instance,
since price range has been identified as the most informative decision attribute, further
research could consider developing fine-grained competition measures such as number of
suppliers, that is, competition concentration, in the same price range. Additionally,
participant concentration of suppliers in the similar price range participating on the
platform can be further considered as a predictor influencing a focal supplier’s participa-
tion decision. Thus, moving forward, many diverse and fine-grained measures of compe-
tition can be constructed, and their impact on platform participation can be incrementally
examined.
Conclusion
We offer three key takeaways for researchers, managers and policy makers. First, con-
venience as a new organizing principle co-evolving with platforms that facilitate repeated,
low value, and novel transactions is an evolving, emergent field of study, practice, and
policy that begets substantive future investigation. Our study suggests that different points
of view, or theories, must be simultaneously considered when exploring issues related to
this emergent field. Instead of just focusing on platform providers, we should also
approach issues from the perspectives of different stakeholders, such as platform partici-
pants and complementors, which will enrich our understanding of platforms. Second,
there exist interdependencies between predictors of platform outcomes that lie across
multiple levels of theory. This analysis is an attempt to reconcile multiple multi-level
predictors. However, because of the complexity, diversity and uncertainties associated
with different types of platforms, there may be other combinations of predictors which
offer fertile research opportunities. We call for further multi-level research that goes
beyond looking at hierarchical relationships across only two levels of analysis to develop
a deeper nuanced understanding of platform phenomena. Finally, our methodological
contributions provide opportunities for developing a richer agenda for IS researchers.
Though decision tree induction is not a new tool [65-67], advances in the methodology
and availability of large datasets allow researchers to realize its full potential [12]. As
422 KATHURIA ET AL.
envisioned by prior research, this methodology empowers us to study variables across

multiple levels of theory and discover their emergent and tacit combinations. Bringing this
approach to nascent, emergent areas of study, such as platforms, will move our commu-
nity, research and management practice forward on the arc of progress.
Notes
1. A substantive literature examines issues related to user generated content, such as reviews,
ratings, and comments produced by consumers on platforms. Our study is not situated in this
research conversation due to two reasons. First, production of user generated content usually
does not impose an explicit participation cost on the consumers. However, the platform we
examine has an explicit participation cost. Second, generation of content is not the primary
purpose of the platform we study. In our study, restaurants are suppliers of the primary
product – food, that is transacted via the platform.
2. A study by Yaraghi et al. [96], which combined constructs across two levels, is an example of
an exception.
3. Hypothetically, if India matches global peers in current averages for restaurant use (20%) and
online delivery penetration (30%), it will witness more than 50 million online food delivery
transactions a day. In 2019, UberEATs charges 0.23 cents per delivery from customers. Other
platforms charge higher fees from either customers or restaurants.
4. Julius Pacuis introduced the concept of abduction in 1597 by translating the Aristotelian
concept of apagoge [68]. Peirce posited that abduction denotes the “only truly knowledge
extending means of inferencing,” categorically distinct from deduction and induction [59].
These ideas have been systematically received and adopted by various social sciences over the
past several decades.
5. The definitions of suppliers and consumers are abstractions to increase applicability across
a wide spectrum of platforms. For example, on a food delivery platform, restaurants are
suppliers and individual users are consumers. Similarly, on a crowdfunding platform, entities
who are seeking funding are consumers whereas those who provide funding are suppliers.
6. There are more than 500 restaurants containing the word “Sagar” in their name. Though
these restaurants are not part of a chain, typically owners of many of these restaurants belong
to the same community. Restaurants with the name “Shiv Sagar” form an institutional chain
as they share common features such as offering a no frills, vegetarian, Indian cuisine
experience for low prices. Number of Outlets, is therefore a contextually valid predictor.
7. The usefulness and high economic impact of product ratings and reviews for other users is
undeniable (e.g., [22]. However, since the producer knows his or her own quality completely,
the impact of user reviews and ratings on the producer’s decision processes on a two-sided
platform deserves further investigation. We investigate impact of user ratings on
a restaurant’s decision to participate (or not participate) on the food delivery platform.
8. We collect data from this platform only at the end of November 2017 as there were three
exogenous shocks which created extreme discontinuities, warranting data collection only
after their effects had subsided. First, in November 2016, there was demonetization in India
whereby large currency notes were declared void overnight. This was accompanied by
a concerted policy push to encourage citizens and firms to adopt digital means for conducting
business transactions. Second, a Supreme Court of India ruling in April 2017 banned
restaurants from serving alcohol within 500 meters of national and state highways. As a
consequence, numerous restaurants suffered large business losses. Later in August 2017, the
Supreme Court clarified that this ruling does not apply within city limits. Third, in July 2017,
a unified indirect tax called the Good and Services Tax (GST) was introduced by the Federal
Government of India. This singular tax replaced existing multiple cascading taxes levied by
various levels of government. Disruptions due to the introduction of GST were extensive
since this increased the regulatory and administrative burden as all (documented and
undocumented) parties in the value chain were dragged into the regulatory tax structure
without any preparation. This increased the overall tax burden both on restaurants and
consumers. This forced a change in the GST as later in November 2017, the government
changed GST to reduce the tax rates to pre-GST rates. Our data collection is also timely
considering subsequent changes in the food delivery ecosystem as a key platform was
acquired in December 2017, while other platforms started aggressively increasing restaurant
platform participation fees in subsequent time periods.
9. There exist other differences between the platform we choose to study, and other platforms
present in the market. Although these inter-platform differences may plausibly drive parti-
cipation decisions of restaurants on other platforms, they do not impact our study as none of
these factors deter participation on the focal platform, which is an independent, non-
exclusive decision.
10. Modern India is an amalgamation of multiple cultures with a shared history of several
millennia. For example, the 2011 Linguistic Survey of India identified over 780 languages
and 66 different scripts in use across the nation. Indian cuisines reflect this diversity and
historical richness, with there being no pan-Indian cuisine. Indian cuisine can be broadly split
into five categories – northern, southern, eastern, western, and northeastern, with the cuisine
of each region reflecting its local produce, cultural diversity, and varied demographics. The
restaurants in our dataset also reflect this diversity; they collectively serve 133 unique cuisines,
out of which 35 are Indian and the remaining 98 are international cuisines.
11. We chose to limit our sample to restaurants from the top 7 metropolitan cities in India. Four
of the older, mature metros included in our study are Mumbai (population approximately
20 million), Delhi (population approximately 25 million), Kolkata (population approximately
14 million) and Chennai (population approximately 8 million). Recently, the metros of Pune
(population approximately 10 million), Bangalore (population approximately 10 million) and
Hyderabad (population approximately 9 million) have seen rapid growth given the growth of
the IT industry in India. Thus, the seven largest metros to which we restrict our sample
encompass a total population of approximately 96 million people.
12. There were 35,815 (37%) missing values on the platform-level predictor – Rating. This is
a key observation which deserves further exploration. However, this is likely to be the case
when studying digital platforms as inactivity can be seen on most platforms (one outcome of
the long tail phenomena/effect). Due to network effects-based incentives, platforms wish to
display large number of participants to the other side of the market. Hence many platforms
do not delete inactive participants. In our case, the platform does not reveal that a restaurant
has exited the platform. We observe that a large number of the missing ratings in our
population belong to inactive (closed) restaurants. Newly opened restaurants also do not
have a rating for the first 3-months due to platform regulations. Finally, restaurants that do
not have any user-generated reviews also do not have a rating. Based on our research design,
objective of inductively developing theory by leveraging multi-level predictors, and since our
data does not indicate the reason behind the lack of rating — that is, if the restaurant is
closed, newly opened or lacks reviews, we excluded these data points from our analysis.
We conducted detailed ex post analysis on this sub-sample. First, we conducted a descriptive
analysis. 12,679 of the restaurants without ratings were outside the top 7 metros, which is
proportionate to the total number of restaurants outside the metros. This implies that in the
smaller cities, the platform is arguably not used for reviews. There is no user generated
content and reputation is not digitized or migrated to the digital medium. In other words,
non-metro India is not digital, at least for restaurant reviews and delivery. This finding also
validates our sampling criterion of only focusing on restaurants in the big 7 metros of India.
A disproportionate number of restaurants (20,033) had low prices; these restaurants plausibly
do not have enough reviews because their customers may not be technology savvy. Finally,
nearly half of the restaurants (17,296) were indicated as participating on the platform. It is
plausible that these restaurants were either shut down or newly opened as participating
restaurants usually have ratings. Overall, we can infer that half of the restaurants without
ratings did not have enough reviews, whereas the other half were either closed or newly
424 KATHURIA ET AL.
opened. Second, we re-ran our main analysis for the entire population of restaurants in the 7
top metros, without including the platform-level predictor. Our main findings and resultant
decision rules remain qualitatively unchanged.
13. The process to determine latitudes and longitudes of restaurants consisted of several steps.
First, we programmed a script to use Google Maps API and find exact matches for the entire
address of the restaurant. This yielded 65,065 matches for which latitudes and longitudes
were extracted and used. The script was then rerun after deleting all words before the
first, second and third commas in the address, yielding another 16,236, 1,863 and 388
coordinates respectively. Finally, we used Amazon Mechanical Turk to confirm the latitude
and longitude coordinates for the 18,487 restaurants for which a non-exact match was
retrieved by comparing the result from two different tools provided by Google and NASA.
Only 937 coordinates met our strict condition that results from the two tools must be within
10 meters of one another. Thus, we were able to represent 66,002 restaurants in space.
14. Measures related to spatial concentration of competition can be created either as a count of
all competitors within a specific distance to the focal firm, or as a distance-weighted measure
(e.g., [78, 82]). A criticism of count-based measures is that these ignore the presence of any
firms that fall beyond a geographic boundary, irrespective of how close they lie to the
boundary. Weighted density measures redress the problem of arbitrary boundaries.
Although distance-weighted measures are considered nuanced, nevertheless, a count-based
measure seems reasonable for our study due to the following logic. First, our qualitative
analysis suggests that customers typically choose from restaurants within a walking or
commutable geographic area. In other words, all competitors of a focal restaurant within
a specific geographic area are relatively equal. Second, distance-weighted measures have been
used in studies involving large distances between locations. The walkable or commutable
distance pertinent for our study is much smaller as it is the distance that can be covered in
a 10-minute walk/commute within a densely populated city, which is less than 1 kilometer.
Hence the difference between a distance-weighted and a count-only measure would be
insignificant at such small values. Finally, though our qualitative interviews suggested that
a 0.5-kilometre radius is sufficient to capture all spatially concentrated restaurants, we chose 1
kilometer as our boundary out of an abundance of precaution.
15. Caution needs to be exercised when applying the C4.5 algorithm. Predictors with large
number of (almost) continuous values can be mistakenly considered by the C4.5 algorithm
to be informative. We guard against this potential concern by recoding continuous variables
in our data into an appropriate number of (high/medium/low) bins. These choices are
articulated clearly when we describe our predictors in the section describing our data.
16. We include a total of fourteen predictors across various levels to predict platform participation.
It is not adequate to merely examine a decision point as our objective is to discover patterns of
decision sequences, constituting the interdependencies between these fourteen predictors, not an
individual decision or decision outcome alone. Our methodology of decision tree induction
discovers combinations of predictors which are not likely to be known ex ante. In contrast,
empirical methods such as probit regression methods require scholars to specifically construct
and include interaction terms ex ante when predicting outcomes. Additionally, if scholars
construct four-way interactions, all possible three-way interactions are required to be included
in the regression models; leading to an explosion of interaction terms in the regression models.
Furthermore, econometric approaches are not suited to our objective as our target is to study the
decision journey and flow. Given these obstacles, we do not choose regression-based empirical
models. Finally, the longest path in our decision tree incorporates an interaction of seven
predictors – an emergent finding, not known ex ante. Thus, our choice of an inductive
methodology is well-suited for knowledge discovery.
17. Note that the longest path in our trees is discovered in phase 2 of our analysis. This path,
depicted as the leaves corresponding to number of outlets in Figure B1 of Online
Supplemental Appendix B, corresponds to an interaction of seven predictors.
18. To improve readability of the trees, branches or leaves having similar outcomes (for example,
low and medium ratings resulting in participation) were coalesced into a single branch or leaf
respectively.
19. Studies find that hybrid strategic profiles result in lower performance as compared to purer
strategic profiles [7, 81]. This is due to mutual exclusivity of some strategies, vulnerability of
intermediate strategic profiles, and increases in organizational complexity (see [7] for an
extensive review). Other studies demonstrate the viability of mixed strategic profiles by
adopting contingent perspectives [30, 81].
20. Prior research has also argued that multiple contingencies could also have a conflicting
influence such that effect of a set of predictors is cancelled out by the influence of other
predictors. However, we do not observe any conflicting contingencies.
21. The design of online platforms constantly evolves as platforms introduce new features to
improve usability and phase out features that were not used in the past. Thus, given the
constant evolution of platforms, constructing a panel data set is relatively difficult. Given the
nature of the research objectives of our study, we leverage a cross-sectional data set to explore
the influence of predictors across various levels of theory that guide platform participation.
Acknowledgements
We thank participants at seminars at the Asian School of Business, Chinese University of Hong Kong,
Georgia State University, Indian School of Business, and University of Hawai’i at Mānoa for helpful
comments on previous versions of this paper. Any errors that might remain are our own.
Funding
A. Kathuria would like to thank Actuate Business Consulting for partial financial support for
this study. This study was also partially supported by the Hong Kong Research Grants Council
(GRF 17503418) awarded to A. Kathuria and the University of Hong Kong Seed Fund for Basic
Research (#104003315) awarded to P. Karhade.
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About the Authors

Abhishek Kathuria (abhishek_kathuria@isb.edu) is an Assistant Professor of Information Systems
at the Indian School of Business, India. He received his Ph.D. in Business Administration from the
Goizueta Business School at Emory University. His research examines the business value of IT,
focusing on innovation, digital platform strategies, and emerging economies. His work has been
published in such journals as Journal of Management Information Systems, Information Systems
Research, Communications of the Association for Information Systems, among others, and received
multiple best paper nominations and awards at various academic conferences. Dr. Kathuria is an
advisor to and co-founder of multiple startups and consults on business transformation, organiza-
tional turnarounds, and IT strategy with public and private corporations in Hong Kong, India, and
the Middle East.
430 KATHURIA ET AL.
Prasanna P Karhade (karhade@hawaii.edu) is an Assistant Professor of Information Technology

Management, and Shidler College Faculty Fellow at the Shidler College of Business, University of
Hawai’i at Mānoa. He holds a Ph.D. in Business Administration from the University of Illinois at
Urbana-Champaign. He worked as a software engineer before embarking on an academic career.
Dr. Karhade’s research interests include design of formal contracts for governing IT outsourcing
relationships, IT governance, and the impact of IT on firm innovation. His work has been published
in Information Systems Research and MIS Quarterly.
Benn R. Konsynski (benn.konsynski@emory.edu; corresponding author) is the George S. Craft
Distinguished University Professor of Information Systems and Operations Management at the
Goizueta Business School at Emory University. He holds a Ph.D. in Computer Science from Purdue
University. He has held faculty positions at the University of Arizona and Harvard Business School,
and served as adviser and board member in public and private corporations. He was also named
Baxter Research Fellow at Harvard, and Hewlett Fellow at The Carter Center. Dr. Konsynski
specializes in issues of digital commerce and information technology in relationships across
organizations, and has published in such diverse journals as Communications of the ACM,
Harvard Business Review, Journal of Management Information Systems, MIS Quarterly, Decision
Sciences, Information Systems Research, IEEE Transactions on Software Engineering, and many
others.

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ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/mmis20

In the Realm of Hungry Ghosts: Multi-Level Theory

Abhishek Kathuria , Prasanna P Karhade & Benn R. Konsynski

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In the Realm of Hungry Ghosts: Multi-Level Theory for Supplier

Benn R. Konsynski benn.konsynski@emory.edu Information Systems and Operations Management, Goizueta

theoretical, managerial and policy implications, especially in emerging economies where

Background Literature and Theory Development

Key Thematic Issues

with Tiwana et al.’s deﬁnition “extensible codebase of a software-based system that

Theoretical Levels for Platform Participation

Predictors within Theoretical Levels

Supplier-Level Digital Readiness Predictors

Supplier-Level Digital Readiness Predictors

Multi-Level Theorizing with Decision Tree Induction

Data Partitioning and Induction of Trees

induction organizes attributes in a context-dependent manner; certain questions are only

Table 1. Computational experiments to select best representative tree.

a staged approach to theory development is critical as the competition-based variables

Selecting the Best Representative Tree

Figure 1. Tree One: Decision journey for platform participation.18

Key Findings from Phase 1

Table 2. Top context-speciﬁc rules discovered from decision tree induction.

The Middle Way Rule

The Low-End Meat Corner Rule

The Upscale Bar Rule

The Non-Metro Vegetarian Rule

Key Findings from Phase 2

The Average Performing Meat Corner Rule

The Upscale Sports Bar Chain Rule

Abducting Theoretical Propositions

Table 3. Observations and Theoretical Proposition 1.

Table 4. Observations and Theoretical Proposition 2.

Next, we scrutinized the interrelationships among predictors across various levels. We

Table 5. Observations and Theoretical Proposition 3.

Table 6. Observations and Theoretical Proposition 4.

In summary, by making systematic observations, our abductive approach facilitates the

researchers to focus their attention on the predictors deemed informative. Additionally,

Implications for Practice

Implications for Policy

Strengths and Limitations

Directions for Future Research

envisioned by prior research, this methodology empowers us to study variables across

About the Authors

Prasanna P Karhade (karhade@hawaii.edu) is an Assistant Professor of Information Technology

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