Shifting to a Platform Business: How Empathy Mitigates Consumer Risk
How is a sharing market created? Although sharing has been theorized as a fundamental consumer behavior, it is not an uncontested construct, nor is it a completely natural human practice. Moreover, managers of sharing business platforms are often confronted with harsh criticism and resistance from important stakeholder groups, including regulators and consumers when risk is shifted from the traditionally company onto individual market actors.
Building on the sociology of empathy and an institutional analysis of the ridesharing company Uber, this paper introduces market empathization as a process through which platform businesses are repositioned from the institutional domain to the domain of individual empathy. We identify four interrelated processes that address each of the stakeholder complaints and help establish a sharing market: humanization, universalization, prototyping, and contracting.
This study provides both managerial and theoretical implications for the sharing and market systems literatures.
About the speaker
Markus Giesler is an Associate Professor of Marketing at the Schulich School of Business and chair of the marketing department. His research, which focuses on market creation and customer experience design, has been funded by major grants, published in top-tier academic journals, and featured in the global media. He blogs at markus-giesler.com.