Publications
Publications
- 2018
- Strategic Management Journal
Threat of Platform-Owner Entry and Complementor Responses: Evidence from the Mobile App Market
By: Wen Wen and Feng Zhu
Abstract
We examine how app developers on the Android mobile platform adjust their innovation efforts (rate and direction) and value-capture strategies in response to Google’s entry threat and actual entry into their markets. We find that, after Google’s entry threat increases, affected developers reduce innovation and raise the prices for the affected apps. Once Google enters, the developers reduce innovation and increase prices further. However, app developers’ incentives to innovate are not completely suppressed; rather, they shift innovation to unaffected and new apps. Given many apps already offering similar features, Google’s entry may reduce such social inefficiency.
Keywords
Platform-owner Entry; Entry Threat; Innovation; Complementors; Mobile App Industry; Digital Platforms; Mobile and Wireless Technology; Market Entry and Exit; Price; Innovation and Invention
Citation
Wen, Wen, and Feng Zhu. "Threat of Platform-Owner Entry and Complementor Responses: Evidence from the Mobile App Market." Strategic Management Journal 40, no. 9 (September 2019): 1336–1367.