Should I stay or should I go? Migrating away from an incumbent platform

Jacques Crémer, Gary Biglaiser and André Veiga

No 21-1281, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We study incumbency advantage in markets with positive consumption externalities. Users of an incumbent platform receive sto- chastic opportunities to migrate to an entrant and can either accept them or wait for a future opportunity. In some circumstances, users have incentives to delay migration until others have migrated. If they all do so, no migration takes place, even when migration would have been Pareto-superior. We use our framework to identify environments where incumbency advantage is larger. A key result is that having more migration opportunities actually increases incumbency advantage.

Keywords: Platform; Migration; Standardization and Compatibility; Industry Dynamics (search for similar items in EconPapers)
JEL-codes: D85 L14 L15 L16 R23 (search for similar items in EconPapers)
Date: 2022-01-10
New Economics Papers: this item is included in nep-com, nep-ind, nep-mic and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:126336

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