This paper presents a simulation model of industry evolution in which demand regimes and technological regimes shape the relationship between consumers switching costs and first-mover advantage. Our results show that the extent to which switching costs can be an effective mechanism in generating first-mover advantage depends on demand regimes: switching costs have a very strong impact when demand is homogeneous, and a much weaker one when demand is fragmented. The dimensions of demand regimes contribute differently to this outcome: horizontal fragmentation affects the structure of the industry, vertical fragmentation works at the firm level. Finally, the dimensions of technological regimes do not matter when demand is homogeneous; in the opposite case, they are the key determinants of the existence of advantages for early movers. © 2013 Elsevier Ltd.

Are switching costs always effective in creating first-mover advantage? the moderating role of demand and technological regimes

Capone, Gianluca;
2013-01-01

Abstract

This paper presents a simulation model of industry evolution in which demand regimes and technological regimes shape the relationship between consumers switching costs and first-mover advantage. Our results show that the extent to which switching costs can be an effective mechanism in generating first-mover advantage depends on demand regimes: switching costs have a very strong impact when demand is homogeneous, and a much weaker one when demand is fragmented. The dimensions of demand regimes contribute differently to this outcome: horizontal fragmentation affects the structure of the industry, vertical fragmentation works at the firm level. Finally, the dimensions of technological regimes do not matter when demand is homogeneous; in the opposite case, they are the key determinants of the existence of advantages for early movers. © 2013 Elsevier Ltd.
2013
Capone, Gianluca; Malerba, Franco; Orsenigo, Luigi
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11568/949296
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