Open platform adoption in regard to complementors

Abstract

With the advent of the Smartphone, complementors are becoming important. So, open source platforms focusing on complementors can be an effective catch-up strategy for speeding up the technology adoption process. To see this, the competition between an open source platform and a proprietary platform is assumed. Then a 2ⅹ2 extensive game is used to simulate nth manufacturer and software firms decision to choose platforms to develop products. They are assumed to bounded rational because of uncertainty of technological development. It is analyzed with respect to market share, expenditure from each platform and degree of diversity from product life cycle. To focus on the impact of complementors strategic behaviors, the assumption of winner takes it all is controlled. Result show the importance of initial condition that high open platform market share with small difference between each market increases the possibility of selecting open platform. Moreover they indicate that collaborators tend to select the open platform with high rents from the proprietary platform, low cost from the open platform and diverse products.