Competitive Dynamics of Web Sites

22 Pages Posted: 8 Jun 2000

Date Written: March 17, 2000

Abstract

We present a dynamical model of web site growth in order to explore the effects of competition among web sites and to determine how they affect the nature of markets. We show that under general conditions, as the competition between sites increases, the model exhibits a sudden transition from a regime in which many sites thrive simultaneously, to a "winner take all market" in which a few sites grab almost all the users, while most other sites go nearly extinct. This prediction is in agreement with recent measurements on the nature of electronic markets.

JEL Classification: D41, D50

Suggested Citation

Maurer, Sebastian and Huberman, Bernardo A., Competitive Dynamics of Web Sites (March 17, 2000). Available at SSRN: https://ssrn.com/abstract=218753 or http://dx.doi.org/10.2139/ssrn.218753

Sebastian Maurer

Xerox PARC ( email )

3333 Coyote Hill Road
Palo Alto, CA 94304-1314
United States

Bernardo A. Huberman (Contact Author)

CableLabs ( email )

400 W California Ave
Sunnyvale, CA 94086
United States

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