Abstract
In markets with network externalities, the technology that gains a critical mass of users will gain market momentum, and further attract users. Despite this predicted self-reinforcing feedback propelled by “excess inertia”, we observe technologies dethroning established systems in several contexts. Why are some technologies able to sustain momentum over time while others loose it in favor of dethroners? We address this question conceptually, by revisiting the concept of momentum into the inertial and dynamic components, and empirically, by estimating the effects of both components on technology adoption and market performance in a platform technology context. Drawing from Physics, we conceptualize the inertial component of momentum (i.e., mass) as the stock of platform complements, and the dynamic component (i.e., velocity) as the period-by-period change in such stock, or complement novelty. We show that the dynamic component of momentum explains to a larger extent the sustained momentum and performance of a platform technology system, and has a predictability power for estimating the point at which the overall market tips for platforms of next generation technology. This has relevant implications for technology adoption and competitive dynamics, and help explain why latecomers may dethrone incumbents despite network disadvantage.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
