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

47 Pages Posted: 14 Apr 2020 Last revised: 28 Jan 2021

See all articles by Gary Biglaiser

Gary Biglaiser

University of North Carolina

Jacques Cremer

Toulouse School of Economics

Andre Veiga

Imperial College London

Multiple version iconThere are 4 versions of this paper

Date Written: January 28, 2020

Abstract

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. 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

Biglaiser, Gary and Cremer, Jacques and Veiga, Andre, Should I stay or should I go? Migrating away from an incumbent platform (January 28, 2020). Available at SSRN: https://ssrn.com/abstract=3557782 or http://dx.doi.org/10.2139/ssrn.3557782

Gary Biglaiser

University of North Carolina ( email )

Chapel Hill, NC 27599
United States
919-966-4884 (Phone)
919-966-4986 (Fax)

Jacques Cremer (Contact Author)

Toulouse School of Economics ( email )

1 Esplanade de l'Université
Toulouse Cedex 06, 31080
France

Andre Veiga

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

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