Migration between Platforms

46 Pages Posted: 7 Apr 2020

See all articles by Gary Biglaiser

Gary Biglaiser

University of North Carolina

Jacques Crémer

University of Toulouse Capitole

André Veiga

University of London, Imperial College of Science, Technology and Medicine - Department of Economics

Multiple version iconThere are 4 versions of this paper

Date Written: 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. This provides an endogenous micro-foundation for incumbency advantage. We use our framework to identify environments where incumbency advantage is larger.

Keywords: platform migration, standardization and compatibility, industry dynamics

JEL Classification: D850, L140, R230, L150, L160

Suggested Citation

Biglaiser, Gary and Crémer, Jacques and Veiga, André, Migration between Platforms (2020). CESifo Working Paper No. 8185, Available at SSRN: https://ssrn.com/abstract=3570287

Gary Biglaiser (Contact Author)

University of North Carolina ( email )

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

Jacques Crémer

University of Toulouse Capitole ( email )

France

André Veiga

University of London, Imperial College of Science, Technology and Medicine - Department of Economics ( email )

53 Prince's Gate
Exhibition Road
London, SW7 2PG
United Kingdom

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