Platform Contracting With Developers: Reconsiderung the "Control vs. Enable" Decision of Platforms from an Implementation Perspective

Platform intermediaries recur to the use of specific contractual forms when hiring developers. We study such contracts in a market model with a monopoly platform and a continuum of consumers and focus on multi-agent contracting under adverse selection on the developer side. Transfer discrimination between developers is possible but potentially limited. There is a development stage with ex-ante contracting. Two distinct types of implementation emerge: under Bayesian Implementation, higher information rents lead to more distortions. In turn, Dominant Strategy Implementation enables first-best production sharing under joint quality determination between the developers. As we bring two theoretical concepts to the analysis of two-sided platforms, our paper sheds new light on the nature of contractual relationships between a platform and multiple developers, so expanding the formal study of two-sided platforms beyond pricing.