Crémer, Jacques, Biglaiser, Gary and Veiga, André (2022) Should I stay or should I go? Migrating away from an incumbent platform. RAND Journal of Economics, vol. 53 (n° 3). pp. 453-483.

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Identification Number : 10.1111/1756-2171.12418


We study incumbency advantage in markets with positive consumption externalities. Users of an incumbent platform receive sto- chastic 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.

Item Type: Article
Language: English
Date: August 2022
Refereed: Yes
Uncontrolled Keywords: Platform, Migration, Standardization and Compatibility, Industry Dynamics
JEL Classification: D85 - Network Formation and Analysis - Theory
L14 - Transactional Relationships; Contracts and Reputation; Networks
L15 - Information and Product Quality; Standardization and Compatibility
L16 - Industrial Organization and Macroeconomics - Industrial Structure and Structural Change; Industrial Price Indices
R23 - Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 19 Sep 2022 13:40
Last Modified: 18 Jul 2023 10:15
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