Market Expanding or Market Stealing? Competition with Network Effects in BikeSharing

Guangyu Cao, Ginger Zhe Jin, Xi Weng and Li-An Zhou

No 24938, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using staggered entry of two dockless bikesharing firms, we find the entrant expands the market for the incumbent. The entry helps the incumbent to serve a greater number of trips, make more bike investment, achieve higher revenue per trip, improve bike utilization rate, and form a wider and more evenly distributed network. The market expansion effect on new users dominates a significant marketstealing effect on old users. These findings, together with a theoretical model that highlights consumer search and network effects, suggest that a market with positive network effects is not necessarily winnertakesall, especially when users multihome across compatible networks.

JEL-codes: D22 L1 L4 L9 R4 (search for similar items in EconPapers)
Date: 2018-08
New Economics Papers: this item is included in nep-com, nep-ind, nep-pay and nep-ure
Note: IO
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Citations: View citations in EconPapers (7)

Published as Guangyu Cao & Ginger Zhe Jin & Xi Weng & Li‐An Zhou, 2021. "Market‐expanding or Market‐stealing? Competition with network effects in bike‐sharing," RAND Journal of Economics, RAND Corporation, vol. 52(4), pages 778-814, December.

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