Should I stay or should I go? Migrating away from an incumbent platform
54 Pages Posted: 14 Apr 2020 Last revised: 6 Jan 2022
There are 4 versions of this paper
Migration between Platforms
Should I stay or should I go? Migrating away from an incumbent platform
Should I Stay or Should I Go? Migrating Away from an Incumbent Platform
Date Written: December 17, 2021
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
JEL Classification: D85, L14, R23, L15, L16
Suggested Citation: Suggested Citation