The “Human” Role in Matching Platforms

By: Rikiya Tsuchihashi Tsuchihashi   Kazuyuki Kozawa  

Matching platforms such as Airbnb and Uber have become widely accepted in modern society. The role of matching platforms is to reduce transaction costs for users, implying that platforms that most effectively reduce transaction costs can gain a competitive advantage. To reduce costs, platforms invest in technology such as recommendation systems, reviews and ratings, and search tools. Although prior research has stressed the importance of reducing transaction costs, how to achieve this reduction has not been fully examined. Moreover, existing research does not account for the surge of artificial intelligence and the human role. From a qualitative case study on the Japanese logistics industry, we reveal the advantage of direct human intervention in matching platforms. In the early 2000s, due to the advancement of information technology, more than 40 Vehicle-Cargo matching platforms emerged in the Japanese logistics industry. These platforms match “return truck” and cargos. Although most platforms utilizing a “Bulletin Board” interface to match return truck and cargos have failed, platforms with a “visible hand” have succeeded, reflecting the strength of direct employee involvement in the search, negotiation, and coordination process. We find three factors behind the strength of the “visible hands” strategy compared to the “invisible hands” strategy: acceptance of ambiguities, reduction of complexities, and, reliability. For early-stage enterprises, we find that a “visible hands” strategy may reduce transaction costs. This proposal contributes to platform strategy by shedding light on new sources of competitive advantage.

Matching Platforms, Transaction Costs, Visible Hands
Change Management
Paper Presentation in a Themed Session

Rikiya Tsuchihashi Tsuchihashi

Associate Professor, Department of Business Management , Aichi Gakuin University, United States
United States

I'm an associate professsor of Depatrment of Business Management at Aichi Gakuin University in Japan. I used to work at Department of Economics of Nagasaki University as associate professor from 2011 to 2017.  My research interests are platform strategy in two-sided markets, innovation management, and competitive strategy. I received Ph.D. in Economics from Nagoya University in 2011. 

Kazuyuki Kozawa

Professor, Aichi Gakuin University, Japan