Upstream, Downstream: Diffusion and Impacts of the Universal Product Code

Basker, Emek; Simcoe, Timothy

doi:10.1086/712762

Cited by 19 publications

(8 citation statements)

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“…Our findings extend prior work showing that novel tools in the management of platforms such as awards can be used to create and maintain a vibrant platform (Foerderer et al, 2021; Rietveld et al, 2019; Rietveld et al, 2020; Rietveld et al, 2021). Second, we contribute to the literature on network effects (Afuah, 2013; Basker & Simcoe, 2021; Katz & Shapiro, 1994; Rietveld & Ploog, 2022) by showing that product‐level network effects have implications for how the products will be perceived and managed by platform owners with implications for product performance. The study also has practical implications for both platform owners and complementors.…”

Section: Introductionmentioning

confidence: 92%

“…These mechanisms have been extensively described in the network effects literature. For instance, in the competition for technological standards, the video standard Betamax was considered superior to VHS while VHS ended up dominating the market (Arthur, 1994;David, 2001;Page, 2006). As a result of these mechanisms, the platform owner may have an incentive to help resolve the uncertainty and tip the adoption toward one of the competing products.…”

Section: Theoretical Framework and Hypothesesmentioning

confidence: 99%

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Growing platforms within platforms: How platforms manage the adoption of complementor products in the presence of network effects?

Agarwal

Miller

Ganco

2023

Strategic Management Journal

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Research Summary Platform owners often use endorsements to actively manage complementor firms. We argue that the direct network effects of complementors' products play a central role in the platform management by its owner. We test our predictions using data on the Apple's promotion of apps. We find that apps with network effects are more likely to receive an award. This likelihood increases when the app is introduced by a developer with a larger market share but declines when introduced in a concentrated segment. The likelihood decreases further if the app is introduced in a concentrated segment by a developer that holds a larger market share. Further, we observe that in concentrated segments, the “challenger” developer has a higher likelihood of receiving the award relative to the leader. Managerial Summary Many products offered through platforms have their own direct network effects. The value of the product for each user grows with the number of other consumers using the product. Many platform owners also actively manage their platforms to ensure platform growth and often use less traditional tools such as product endorsements to achieve this goal. In the context of video games listed in the iOS App Store and the Editors' Choice Awards as a form of product endorsement, we examine the tradeoffs that products with direct network effects (i.e., multiplayer video games) present to the platform owner (Apple). On the one hand, the platform owner may want to promote apps with direct network effects to help them achieve a momentum in terms of user growth. On the other hand, networked apps may become dominant in the segment with negative implications for future growth of the segment and the platform owner's profitability. We find evidence consistent with this tension and find that it critically depends on the complementor strength and market segment concentration. We also observe that in concentrated segments, the “challenger” developer has a higher likelihood of receiving the award relative to the leader.

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Section: Introductionmentioning

confidence: 92%

Section: Theoretical Framework and Hypothesesmentioning

confidence: 99%

Growing platforms within platforms: How platforms manage the adoption of complementor products in the presence of network effects?

Agarwal

Miller

Ganco

2023

Strategic Management Journal

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“…Retail sales data reflects tobacco product sales registered through the electronic scanning of the Universal Product Code (UPC), a barcode symbology that is widely used for tracking trade items in stores (11). The data included sales from convenience stores, gas stations, grocery stores, drugstores/pharmacies, mass merchandiser outlets, club stores, dollar stores, and military sales.…”

Section: Data Descriptionmentioning

confidence: 99%

Use of a multi-method approach to rapidly assess the impact of public health policies at the state and local level: a case study of flavored e-cigarette policies

et al. 2023

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Background E-cigarettes are the most-commonly used tobacco product by youth since 2014. To prevent youth access and use of e-cigarettes, many U.S. states and localities have enacted policies over a relatively short period of time. The adoption of these policies has necessitated timely data collection to evaluate impacts. Methods To assess the impact of flavored e-cigarette policies in select states and local jurisdictions across the United States, a multi-method, complementary approach was implemented from July 2019 to present, which includes analyses of cross-sectional online surveys of young people ages 13–24 years with retail sales data. Results From February 2020 through February 2023, cross-sectional surveys have been conducted in three cities, one county, and eight states where policy changes have been enacted or are likely to be enacted. Data collection occurred every six months to provide near real-time data and examine trends over time. Additionally, weekly retail sales data were aggregated to showcase monthly sales trends at the national level and for the selected states. Discussion This rapid and efficient method of coupling online survey data with retail sales data provides a timely and effective approach for monitoring a quickly changing tobacco product landscape, particularly for states and localities where rapidly-available data is often not available. This approach can also be used to monitor other health behaviors and relevant policy impacts.

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“…The role of complementary technology in adoption is particularly important when multiple agents must adopt simultaneously for a technology to be valuable. Basker and Simcoe (2021) examines adoption of UPC codes, finding that manufacturers are more likely to adopt UPC when other manufacturers sharing the same retail partner have adopted them. Heterogeneous preferences or benefits from a new technology mean that diffusion increases as the cost of technology falls.…”

Section: Theories Of Diffusionmentioning

confidence: 99%

Innovation: Market Failures and Public Policies

Bryan¹,

Williams²

2021

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This is an invited chapter for the forthcoming Volume 4 of the Handbook of Industrial Organization. We summarize the state of the literature on the economics of innovation and highlight open policy questions. We first articulate the key market failures in markets for innovation, and then discuss how both scientific norms and market-oriented policies help overcome those market failures. We close by discussing recent work on the diffusion of inventions as well as on the links between innovation and inequality.

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Upstream, Downstream: Diffusion and Impacts of the Universal Product Code

Abstract: Israeli IO Day (Jerusalem) for helpful comments and conversations. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Cited by 19 publications

References 50 publications

Growing platforms within platforms: How platforms manage the adoption of complementor products in the presence of network effects?

Growing platforms within platforms: How platforms manage the adoption of complementor products in the presence of network effects?

Use of a multi-method approach to rapidly assess the impact of public health policies at the state and local level: a case study of flavored e-cigarette policies

Innovation: Market Failures and Public Policies

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