The app updating conundrum: Implications of platform's rating resetting on developers' behavior

Given the importance of online reviews, digital platforms regularly redesign review systems to enhance platform performance. A unique platform governance aspect of the Apple App Store review system is their resetting of apps' overall ratings each time app developers release an update. This means that with each update apps have to rebuild their reputation from scratch. Using panel data from the Apple App Store, we analyze the effects of developers' updating behavior and of the rating resetting on subsequent app performance. Using an instrumental variable approach, we distinguish between feature and maintenance updates, and whether the app update is the developer's choice or driven by the platform. We find strong indications for divergent effects on app performance subject to the type of update and its source. This suggest that developers can use updating as a strategic instrument and that platform governance has an impact on the strategic importance of this instrument.