Discussion paper

DP14496 Should I stay or should I go? Migrating away from an incumbent platform

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.

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Citation

Biglaiser, G, J CREMER and A Veiga (eds) (2022), “DP14496 Should I stay or should I go? Migrating away from an incumbent platform”, CEPR Press Discussion Paper No. 14496. https://cepr.org/publications/dp14496