Is it Always Better to Be Distinctive? Optimal distinctiveness in the Sharing Economy Platform Market to Maintain Active User

In today's competitive app market, developers must provide a range of user-oriented features to improve app performance. This study extends the theory of optimal differentiation to the sharing economy domain to investigate whether there exists an optimal feature heterogeneity that makes apps perform at their highest. Based on the panel data of eight categories of app information in the sharing economy domain from September 2021 to September 2023, machine learning methods as well as fixed-effects models are used to explore the effect of app functional heterogeneity on app user activity. It is found that there is a significant “inverted U-shaped” relationship between functional heterogeneity and user activity, and we elaborate on the contribution of this finding to the theory of the sharing economy and the competitive strategies of sharing platforms. We also discuss implications for practice and make suggestions for future work.