Platform Takeoff and Self-Fulfilling Expectations: Field Experimental Evidence
26 Pages Posted: 6 Jan 2021
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: Suggested Citation