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

Gary Biglaiser, Crémer, Jacques and Andre Veiga

No 14496, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study incumbency advantage in markets with positive consumption externalities. Users of an incumbent platform receive stochastic 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
New Economics Papers: this item is included in nep-com, nep-mic, nep-ore and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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