| Autor: |
Martin Grossmann, Markus Lang, Helmut M. Dietl |
| Jazyk: |
angličtina |
| Rok vydání: |
2021 |
| Předmět: |
|
| Zdroj: |
Journal of Theoretical and Applied Electronic Commerce Research, Vol 16, Iss 6, Pp 2091-2109 (2021) |
| Druh dokumentu: |
article |
| ISSN: |
0718-1876 |
| DOI: |
10.3390/jtaer16060117 |
| Popis: |
This paper examines the dynamic competition between platform firms in two-sided markets with network externalities. In our model, two platforms compete with each other via a contest to dominate a certain market. If one platform wins the contest, it can serve the market for a certain duration as a monopolistic platform. Our paper shows that platform firms can compensate for cost disadvantages with network effects. A head start (e.g., technological advantage) does not guarantee future success for platform firms. Network effects and cost efficiency are decisive for future success. Interestingly, higher costs of a platform can induce higher platform profits in our dynamic model. Moreover, we find that a platform’s size and profit are not necessarily positively correlated. Our model also provides new insights with respect to the underlying causes for the emergence of market dominance. The combination of technological carry-over and network effects can explain a long-lasting dominance of a platform that benefits from a head start. The necessary preconditions for this emergence are convex costs, small network effects and high carry-over. |
| Databáze: |
Directory of Open Access Journals |
| Externí odkaz: |
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