ScholarWorks@숙명여자대학교

초록

Competition among firms to occupy dominant design positions often results in a winner-take- all market, largely because of network externalities and compatibility. However, many examples show that not all dominant design competition always ends with a winner and a loser. This study examines whether the degree of interoperability provided by a firm (i.e., partial compatibility) affects the outcome of dominant design competition. In particular, we conduct agent-based simulations to demonstrate the dynamic process of interacting various market factors with partial compatibility. In some cases, it has been shown that latecomers can use partial compatibility to overcome winners in dominant design competition. However, it is not always possible to increase compatibility to overcome the first mover’s advantage. In particular, a latecomer can overcome the leading company’s market share by providing a high level of partial compatibility in the following four cases: (1) when the initial market share of a leading firm is not too high, (2) when customers have greater utility in the overall network than their neighbors, (3) when the switching cost is low, and (4) when the relative proportion of the utility obtained from the product is higher than that from the installed base.

키워드