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

Jacques Crémer (), Gary Biglaiser and André Veiga
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Jacques Crémer: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Gary Biglaiser: UNC - University of North Carolina [Chapel Hill] - UNC - University of North Carolina System
André Veiga: Imperial College London

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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)
Date: 2022-08
New Economics Papers: this item is included in nep-com, nep-mic, nep-pay and nep-reg
Note: View the original document on HAL open archive server: https://hal.science/hal-03792918v1
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Published in RAND Journal of Economics, 2022, 53 (3), pp.453-483. ⟨10.1111/1756-2171.12418⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03792918

DOI: 10.1111/1756-2171.12418

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