Schalowski, Jan and Christian Barrot (In press)

The Long-term Diffusion of Digital Platforms — An Agent-based Model

in: Krcmar, Helmut, Jane Fedorowicz, Wai Fong Boh, Jan M. Leimeister and Sunil Wattal (ed.): Proceedings of the 40th International Conference on Information Systems: Munich, (In press).

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Abstract: In recent years, many industries have experienced the rise of digital platforms (e.g., eBay, Uber, or Takeaway.com). A common characteristic of these concepts is that they focus on fragmented markets populated by many small firms, which often show a high fluctuation. However, established diffusion models based on Bass (1969) do not account for fluctuation in the market potential, although the exit of adopters and the entry of new firms could change the diffusion curve significantly. Thus, we propose an extension of the Bass Model to account for the exit and entry of (potential) adopters and empirically test this framework in a real-world setting. Using two decades of adopter data of leading digital platforms and information on the complete market potential, we employ agent-based models to analyze the effects of fluctuation on the platform diffusion. Initial results confirm the existence of high fluctuation and indicate relevant impacts on the diffusion curve.

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