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New CoME Research Employed by Top Academic Journal

 Research

The report “First-or Second-Mover Advantage? The Case of IT-Enabled Platform Market” which describes the results of the research conducted by Professor Min-qiang Li, head of the information management and business intelligence team in the College of Management and Economics (CoME) and his team members Professor Nan Feng and Associate Professor Hai-yang Feng in collaboration with Professor Zheng-rui Jiang of Iowa State University, USA, has been accepted by MIS Quarterly, an international top academic journal in the field of management information systems.(https://www.misq.org/forthcoming/)

MIS Quarterly is listed in the 24 UT/DALLS journals and the 50 top business journals of Financial Times that are generally recognized by business schools worldwide.

The research achievement was the team's second publication in this journal with the first one published in 2018.

Min-qiang Li, Zheng-rui Jiang, Nan Feng, Hai-yang Feng (left to right, top to bottom)

With the rapid development of information technology, the Internet platform constantly emerges in different business sectors, such as: online auction or retail (Amazon, Taobao, Jingdong), social networks (Facebook, Wechat, Weibo), the application market (App Store and Google Play), cloud computing platforms (Amazon AWS, Microsoft Azure), mobile payment systems (Mahala, Pay Treasure, WeChat Wallet), and others.

Based on advanced Internet communication technologies, these Internet platforms connect consumers and producers. The Chinese government’s 2019 national work report, states: “we will adhere to inclusive and prudent regulation, support the development of new business forms and models, and promote the healthy growth of the platform economy and the sharing economy.” Moreover, “promoting platform economic development” has been included in the government work report for two consecutive years, indicating an urgent need for theoretical research and industrial innovation in the field of Internet platform.

In this study carried out by Professor Min-qiang Li and his co-workers, the conditions for the emergence of pioneer advantage and second-mover advantage in the platform market with simultaneous same-edge network effects and trans-edge network effects are analyzed by game theory model, and the order of equilibrium market entry of the two competitive platforms is solved.

The research reveals for the first time that the occurrence of the pioneer/second-mover advantage depends on the following three factors: the technological development speed of the second-mover, the length of the product life cycle and the length of the market growth period. When any one of the three factors is small, both platforms want to be the first mover in the market. Otherwise, the two platforms will choose to enter the market in order in most cases.

In addition, this paper also studies the influence of network effect of the same-side and cross-side network effect on pioneer advantage and second-mover advantage. The results show that the enhancement of network effects of the same-side will enhance the pioneer advantage, while the enhancement of cross-side network effects will enhance the second-mover advantage.

The research has important guiding significance to the platform enterprises’ decision making of the sequence and timing of market entry in a competitive environment. It can help different types of platform enterprises develop a reasonable market entry plan in the face of different market situations to obtain pioneer advantage or second-move advantage and provide decision support for platform design and market entry for Internet platform entrepreneurs. At the same time, it can also be used to guide the governmental formulation of industrial development policies and regulation of the competition in the platform market.

By the College of Management and Economics

Editors: Eva Yin & Doris Harrington