Platform Takeoff and Self-Fulfilling Expectations: Field Experimental Evidence

26 Pages Posted: 6 Jan 2021

See all articles by Kevin Boudreau

Kevin Boudreau

Northeastern University; National Bureau of Economic Research (NBER)

Date Written: November 2, 2020

Abstract

The theoretical literature on platforms and network effects predicts that initial growth of a platform depends on the market’s expectations of future installed base. This paper tests this claim, reporting on a field experiment in which invitations to join a newly launched platform were sent to 16,349 individuals and included randomized statements regarding the future expected installed base (along with disclosures of the current installed base). This study’s results affirm this theory, contribute greater understanding of the nature and importance of expectations, and reveal that market expectations can be influenced.

Keywords: Platforms, expectations, marketing, entrepreneurship, coordination game, network effects, online distributed work

JEL Classification: C93, D83, L11, M31

Suggested Citation

Boudreau, Kevin, Platform Takeoff and Self-Fulfilling Expectations: Field Experimental Evidence (November 2, 2020). Available at SSRN: https://ssrn.com/abstract=3723573 or http://dx.doi.org/10.2139/ssrn.3723573

Kevin Boudreau (Contact Author)

Northeastern University ( email )

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National Bureau of Economic Research (NBER) ( email )

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