Analysis of Network Effect in the Competition of Self-Publishing Market

Abstract:Self-publishing has become a popular e-commerce model. In the current study, we build a duopoly model to examine the impact of the network effect on competition in this emerging market. We investigate four cases depending on two factors: market size and the self-publishing platforms&#82...

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Autores principales:	Chen,Li, Tang,Wen
Lenguaje:	English
Publicado:	Universidad de Talca 2020
Materias:	Self-publishing Online publishing Network effect Compatibility strategy Duopoly competition
Acceso en línea:	http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-18762020000300105
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spelling	oai:scielo:S0718-187620200003001052020-07-06Analysis of Network Effect in the Competition of Self-Publishing MarketChen,LiTang,Wen Self-publishing Online publishing Network effect Compatibility strategy Duopoly competition Abstract:Self-publishing has become a popular e-commerce model. In the current study, we build a duopoly model to examine the impact of the network effect on competition in this emerging market. We investigate four cases depending on two factors: market size and the self-publishing platforms’ compatibility strategy. Our results show that self-publishing writers receive higher royalties compared with the scenario of no network effect except in the case of both platforms choosing incompatibility strategy in the standard market. We also find that self-publishing platforms do not always benefit from the network effect. In the standard market, the platforms will be better off only when they choose incompatibility strategy and the network effect intensity is greater than a certain threshold. In the expanded market, our computational analysis shows that the revenue of the less-known self-publishing platform increases, but the revenue of the leading platform decreases when both platforms choose compatibility strategy. Our findings also show that both self-publishing platforms prefer incompatibility strategy under a strong network effect in the standard market. Otherwise, they prefer compatibility strategy under a weak network effect. In the expanded market, self-publishing platforms have an incentive to choose incompatibility strategy.info:eu-repo/semantics/openAccessUniversidad de TalcaJournal of theoretical and applied electronic commerce research v.15 n.3 20202020-09-01text/htmlhttp://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-18762020000300105en10.4067/S0718-18762020000300105
institution	Scielo Chile
collection	Scielo Chile
language	English
topic	Self-publishing Online publishing Network effect Compatibility strategy Duopoly competition
spellingShingle	Self-publishing Online publishing Network effect Compatibility strategy Duopoly competition Chen,Li Tang,Wen Analysis of Network Effect in the Competition of Self-Publishing Market
description	Abstract:Self-publishing has become a popular e-commerce model. In the current study, we build a duopoly model to examine the impact of the network effect on competition in this emerging market. We investigate four cases depending on two factors: market size and the self-publishing platforms’ compatibility strategy. Our results show that self-publishing writers receive higher royalties compared with the scenario of no network effect except in the case of both platforms choosing incompatibility strategy in the standard market. We also find that self-publishing platforms do not always benefit from the network effect. In the standard market, the platforms will be better off only when they choose incompatibility strategy and the network effect intensity is greater than a certain threshold. In the expanded market, our computational analysis shows that the revenue of the less-known self-publishing platform increases, but the revenue of the leading platform decreases when both platforms choose compatibility strategy. Our findings also show that both self-publishing platforms prefer incompatibility strategy under a strong network effect in the standard market. Otherwise, they prefer compatibility strategy under a weak network effect. In the expanded market, self-publishing platforms have an incentive to choose incompatibility strategy.
author	Chen,Li Tang,Wen
author_facet	Chen,Li Tang,Wen
author_sort	Chen,Li
title	Analysis of Network Effect in the Competition of Self-Publishing Market
title_short	Analysis of Network Effect in the Competition of Self-Publishing Market
title_full	Analysis of Network Effect in the Competition of Self-Publishing Market
title_fullStr	Analysis of Network Effect in the Competition of Self-Publishing Market
title_full_unstemmed	Analysis of Network Effect in the Competition of Self-Publishing Market
title_sort	analysis of network effect in the competition of self-publishing market
publisher	Universidad de Talca
publishDate	2020
url	http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-18762020000300105
work_keys_str_mv	AT chenli analysisofnetworkeffectinthecompetitionofselfpublishingmarket AT tangwen analysisofnetworkeffectinthecompetitionofselfpublishingmarket
_version_	1714202238596939776

Analysis of Network Effect in the Competition of Self-Publishing Market

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