Please use this identifier to cite or link to this item:
|Title:||Exploration and exploitation in the presence of network externalities|
|Keywords:||Network externalities;Exploration and exploitation;Innovation;Technology|
|Citation:||Management Science 49 (4): 553-570, Apr 2003|
|Abstract:||This paper examines the conditions under which exploration of a new, incompatible technologyis conducive to firm growth in the presence of network externalities. In particular, this studyis motivated bythe divergent evolutions of the PC and the workstation markets in response to a new technology: reduced instruction set computing (RISC). In the PC market, Intel has developed new microprocessors bymaintaining compatibilitywith the established architecture, whereas it was radicallyr eplaced byRISC in the workstation market. History indicates that unlike the PC market, the workstation market consisted of a large number of power users, who are less sensitive to compatibilitythan ordinaryusers. Our numerical analysis indicates that the exploration of a new, incompatible technologyis more likelyto increase the chance of firm growth when there are a substantial number of power users or when a new technologyis introduced before an established technologytakes off. (; ; ; )|
|Appears in Collections:||Business and Management|
Brunel Business School Research Papers
Items in BURA are protected by copyright, with all rights reserved, unless otherwise indicated.