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Should I stay or should I go? Migrating away from an incumbent platform

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  • Gary Biglaiser
  • Jacques Crémer
  • André Veiga

Abstract

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

Suggested Citation

  • Gary Biglaiser & Jacques Crémer & André Veiga, 2022. "Should I stay or should I go? Migrating away from an incumbent platform," RAND Journal of Economics, RAND Corporation, vol. 53(3), pages 453-483, September.
    • Handle: RePEc:bla:randje:v:53:y:2022:i:3:p:453-483
    DOI: 10.1111/1756-2171.12418
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