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ENTRY INTO PLATFORM-BASED MARKETS

delete2011-06-27
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OA
AI
F
Feng Zhu *
M
Marco Iansiti
DOI:10.1002/smj.941delete
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Abstract

Abstract

En 中文
This paper examines the relative importance of platform quality, indirect network effects, and consumer expectations on the success of entrants in platform-based markets. We develop a theoretical model and find that an entrant's success depends on the strength of indirect network effects and on the consumers' discount factor for future applications. We then illustrate the model's applicability by examining Xbox's entry into the video game industry. We find that Xbox had a small quality advantage over the incumbent, PlayStation 2, and the strength of indirect network effects and the consumers' discount factor, while statistically significant, fall in the region where PlayStation 2's position is unsustainable. Copyright (C) 2011 John Wiley & Sons, Ltd.
Keywords:
platform-based markets
winner-take-all
first-mover advantage
indirect network effects
video game industry

Journal

Strategic Management Journal cover
Strategic Management Journal
IF:
7.2
Papers:
3.4K
Citations:
4.6W

Organization

U
university of southern california
Scholars:
4.7W
Papers: 3.8W
Citations: 51
H
Harvard University
Scholars:
26.5W
Papers: 22.0W
Citations: 28.7W
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