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

Should I stay or should I go? Migrating away from an incumbent platform We study incumbency advantage in markets with positive consumption externalities. Users of an incumbent platform receive stochastic opportunities to migrate to an entrant and can either accept them 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Rand Journal of Economics Wiley

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

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References (22)

Publisher
Wiley
Copyright
© 2022 The RAND Corporation.
ISSN
0741-6261
eISSN
1756-2171
DOI
10.1111/1756-2171.12418
Publisher site
See Article on Publisher Site

Abstract

We study incumbency advantage in markets with positive consumption externalities. Users of an incumbent platform receive stochastic opportunities to migrate to an entrant and can either accept them 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.

Journal

The Rand Journal of EconomicsWiley

Published: Sep 1, 2022

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