Building trust in digital platform ecosystems

How do we provide a high trust environment for ecosystem participants to interact?

This article is part of the Digital Platforms hub

Platform firms create value through enabling interactions in the ecosystem. Trust is key to enabling these interactions. Platforms that organize fragmented and unorganized markets succeed by fostering a trusted environment for market interactions.

A platform firm must work across a spectrum of mechanisms to foster trust in the ecosystem.

A common approach to fostering trust is through the creation of a reputation system. A reputation system determines the reputation of an ecosystem participant, based on data that is gathered from platform usage as well as data that is imported from other off-platform sources. 

Some platforms set up explicit reputation systems by employing levels and certifications to signal a participant’s credibility. For instance, platforms like Stack Overflow use levels and badges to signal reputation.

The role of reputation extends beyond signaling to informing the platform’s algorithms. For instance, Airbnb displays a host rating externally but may leverage many other signals of host reputation and accommodation quality while determining the ranking and visibility of a particular listing. Identity management and access control play a key role in fostering trust. The rise of Facebook’s social graph as an open utility was a key driver of the sharing economy. Airbnb users and Lyft riders could link their accounts to their Facebook profiles. Tinder and a whole range of other social platforms allowed users to sign up through Facebook Connect. Further, platforms like Airbnb confirm a listing by sending out photographers to the apartment, while babysitters on Sittercity must go through a stringent access control and curation process before being allowed on board.

The higher the interaction risks, the greater the need for trust.