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Migration between platforms

Gary Biglaiser, Jacques Crémer, André Veiga
We study incumbency advantage in markets with positive consumption externalities. Users of an incumbent platform receive stochastic opportunities to migrate to an entrant. They can accept a migration opportunity 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. This provides an endogenous micro-foundation for incumbency advantage. We use our framework to identify environments where incumbency advantage is larger.
Year of publication:
March 2020
Authors: Biglaiser, Gary ; Crémer, Jacques ; Veiga, André
Publisher: Munich, Germany : CESifo, Center for Economic Studies & Ifo Institute
Subject: platform migration | standardization and compatibility | industry dynamics | Netzwerkökonomik | Network economics | Internationale Migration | International migration | Standardisierung | Standardization | Digitale Plattform | Digital platform | Theorie | Theory
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