Development and competition of digital service platforms: A system dynamics approach

• DOI: 10.1016/j.techfore.2016.12.011
• Publication Date: 2017-01-06T03:42:36Z
• Authors: Sampsa Ruutu; Thomas Casey; Ville Kotovirta
• Keywords: Fragmentation; Open platform; Position (finance); Transferability

Digital service platforms are becoming widespread in all areas of society. One risk scenario platform development is related to the fragmentation efforts and failure achieve a critical mass users, while second winner-take-all situation which one firm achieves monopoly position market. We develop system dynamics model that includes two competing platforms, use simulate various paths by varying different factors affect how resources accumulate platforms. Our simulation results show delays users' decision making can increase likelihood achieving mass. In addition, open interfaces data transferability between accelerate adoption decrease situation. The also reveal more nuanced than simple S-shaped growth because cross-side network effects end users providers.