The Role of Coordination Bias in Platform Competition

Hałaburda, Hanna; Yehezkel, Yaron

doi:10.1111/jems.12163

Cited by 36 publications

(31 citation statements)

References 25 publications

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“…Jullien and Pavan (2014) reach the same conclusion, assuming that there is enough dispersion in beliefs about platforms' ability to attract consumers. Halaburda and Yehezkel (2016) show that the qualitative futures of focality follows to an extension with loyal and nonloyal consumers. Yet, the importance of focality is decreasing in the extent to which consumers are loyal to a specific platform.…”

Section: Discussionmentioning

confidence: 99%

“…Though all of these articles acknowledge the dynamic nature of platform competition, their aim is to approximate market characteristics using static models. Halaburda and Yehezkel (2016) extend this concept to partial beliefs advantage and explore how platforms' pricing strategies affect their future profits; the article employs a simple multiperiod setup in which the extent of beliefs advantage depends on the market's history.…”

Section: Introductionmentioning

confidence: 99%

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Dynamic competition with network externalities: how history matters

Hałaburda

Jullien

Yehezkel

2020

The RAND J of Economics

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We consider dynamic competition among platforms in a market with network externalities. A platform that dominated the market in the previous period becomes “focal” in the current period, in that agents play the equilibrium in which they join the focal platform whenever such equilibrium exists. Yet when faced with higher‐quality competition, can a low‐quality platform remain focal? In the finite‐horizon case, the unique equilibrium is efficient for “patient” platforms; with an infinite time horizon, however, there are multiple equilibria where either the low‐ or high‐quality platform dominates. If qualities are stochastic, the platform with a better average quality wins with a higher probability, even when its realized quality is lower, and this probability increases as platforms become more patient. Hence, social welfare may decline as platforms become more forward looking.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Dynamic competition with network externalities: how history matters

Hałaburda

Jullien

Yehezkel

2020

The RAND J of Economics

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“…The second condition for an equilibrium in which platform A wins is that platform A earns positive total prot. Substituting (4) and (12)…”

Section: The Group Is Pivotal: X ≥ Xmentioning

confidence: 99%

“…A is given by (9) when x ∈ [0, x), (12) when x ∈ [ x, x], and p G B is given by (14). Hence, Figure 2: Non-group users' utility as a function of x Non-group users' utility when V λ = 0.5 The gure shows the utility of an individual group user as a function of the size of the group.…”

Section: The Eect Of the Size Of The Group On An Individual Group Usermentioning

confidence: 99%

“…Haªaburda and Yehezkel (2013) consider focality advantage when users are ex-ante uninformed about their benets from joining a platform, and become privately informed once they join. Haªaburda and Yehezkel (2016) and Haªaburda and Yehezkel (2019) extends the concept of focality to a partial degree of focality. Accordingly, users adjust their beliefs concerning the winning platform depending on the price gap between the two platforms.…”

Section: Introductionmentioning

confidence: 99%

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Group Hug: Platform Competition With User-Groups

Markovich

Yehezkel

2018

SSRN Journal

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We consider platform competition in the presence of small users and a usergroup. One platform enjoys a quality advantage and the other benets from favorable beliefs. We study whether the group mitigates the users' coordination problem i.e., joining a low-quality platform because they believe that other users would do the same. We nd that when the group is suciently large to facilitate coordination on the high-quality platform, the group may choose to join the low-quality one. When the group joins the more ecient platform it does not necessarily increase consumer surplus. Specically, a non-group user benets from a group with an intermediate size, and prefers a small group over a large group. The utility of a group user is also non-monotonic in the size of the group.

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Platform diffusion at temporary gatherings: Social coordination and ecosystem emergence

Fang

Clough

2020

Strategic Management Journal

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Research Summary Software platforms create value by cultivating an ecosystem of complementary products and services. Existing explanations for how a prospective complementor chooses platforms to join assume the complementor has rich information about the range of available platforms. However, complementors lack this information in many ecosystems, raising the question of how complementors learn about platforms in the first place. We investigate whether attending a temporary gathering—a hackathon—impacts the platform choices of software developers. Through a large‐scale quantitative study of 1,302 developers and 167 hackathons, supported by qualitative research, we analyze the multiple channels—sponsorship, social learning, knowledge exchange, and social coordination—through which hackathons serve as a social forum for the diffusion of platform adoption among attendees. Managerial Summary A software platform such as Windows, iOS, or Amazon Web Services relies on third‐party developers to create applications that complement the platform and make it valuable for end users. However, developers face a wide range of possible platforms, and they may have limited information about which platforms would be worthwhile to develop for. A software platform business can educate and encourage developers to adopt their platform by supporting in‐person software development competitions, known as hackathons. Developers learn about prospective platforms that advertise at the hackathon. Developers also learn whether and how to use a platform by observing and teaching one other. Hackathons are particularly useful for spreading platform technologies: developers prefer to adopt widely used platforms, and hackathons permit developers to identify and join fashionable platforms.

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The Role of Coordination Bias in Platform Competition

Abstract: This paper considers platform competition in a two

Cited by 36 publications

References 25 publications

Dynamic competition with network externalities: how history matters

Dynamic competition with network externalities: how history matters

Group Hug: Platform Competition With User-Groups

Platform diffusion at temporary gatherings: Social coordination and ecosystem emergence

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