Complexity Induced Risks Posed by Upcoming Digital Ultra-Platforms: An Agent-Based Simulation Model

The global deployment of new digital technologies, such as fifth-generation broadband, Internet of Things, smart objects, and AI, is paving the way for new high-performance digital platforms. These platforms are capable of connecting both people and “things” at high speeds and near-zero latency, taking on the nature of digital “ultra-platforms”. However, the increased reach (i.e., more agents interacting across the platform) and responsiveness (i.e., more opportunities for agents to respond and adapt to each, as they interact) of digital “ultra-platforms” create an unprecedented level of complexity. In this article, we use an agent-based simulation model to study the different types of risks that arise from this increased level of complexity. Three different risks are identified that can hinder a platform's ability to create value. We refer to these risks as the digital black swan, the stacked deck, and push back. Each risk is considered and analyzed from the perspective of specific stakeholders who may be affected by platform externalities. These include the platform owner, platform users, and others who may have no direct interest in the platform. In this way, the article aims to contribute to the literature on digital platform management by focusing on challenges that are emerging from new digital technologies yet have thus far received little attention from either scholars or managers.