Exploration and exploitation in the presence of network externalities

• 成果类型: Article
• 署名作者: Lee, J; Lee, J; Lee, H
• 署名单位: Korea Advanced Institute of Science & Technology (KAIST); Science & Technology Policy Institute (STEPI), Republic of Korea; Korea Advanced Institute of Science & Technology (KAIST); Pai Chai University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.49.4.553.14417
• 发表日期: 2003
• 页码: 553-570
• 关键词: network externalities; Exploration and exploitation; INNOVATION; TECHNOLOGY

摘要

This paper examines the conditions under which exploration of a new, incompatible technology is conducive to firm growth in the presence of network externalities. In particular, this study is motivated by the 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 by maintaining compatibility with the established architecture, whereas it was radically replaced by RISC 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 compatibility than ordinary users. Our numerical analysis indicates that the exploration of a new, incompatible technology is more likely to increase the chance of firm growth when there are a substantial number of power users or when a new technology is introduced before an established technology takes off.