Although economic theory suggests that markets may “tip” toward a dominant platform or standard, there are many prominent examples of persistent incompatibility, interplatform competition, and standards proliferation. This paper examines the phenomena of forking, fragmentation, and splintering in markets with network effects. We illustrate several causes of miscoordination, as well as the tools that firms and industries use to fight it, through short cases of standardization in railroad gauges, modems, operating systems, instant messaging, and internet browsers. We conclude by discussing managerial implications and directions for future research.
|Original language||English (US)|
|Number of pages||15|
|State||Published - Dec 2019|
Bibliographical noteFunding Information:
History: This paper has been accepted for the Strategy Science Special Issue on Strategy in the Digital Era. Funding: Google, Inc., provided financial support for this research.
Copyright: © 2019 INFORMS.
- Network effects