Physical Sciences and Mathematics Commons^™

Platform Competition In Digital Systems: Architectural Control And Value Migration, C. Jason Woodard

C. Jason Woodard

Digital systems give rise to complex layered architectures in which products at one layer serve as platforms for applications and services in adjacent layers. Platform owners face a difficult balancing act. On one hand, they need to make their platforms attractive to potential complementors by mitigating the threat of architectural lock-in. On the other hand, platform owners must be careful not to give away too much too soon, or risk being unable to recoup their own investments. This paper presents an agent-based model that explores this tension at both the firm and industry levels. Computational experiments show that boundedly rational …