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Increasing Returns
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last edited by BillSeitz on Sep 1, 2008 8:22 am

Theory that in markets displaying the , early success translates into more and more success (momentum), resulting in significant marketshare concentration.

Examples: [VCRs] ([VHS] vs Beta), computer operating systems ( vs everything else), etc.

In some cases this can be reinforced by properties - as long as the format for keep changing, it's impossible for 3rd party applications to maintain file compatibility, therefore if you're going to have to exchange files with an user (which is a near-certainty given their existing market share), then you have to buy yourself.

Some also apply it to markets: where being the "biggest" ([First Mover Advantage]) leads to more name recognition, leading to a bigger share of future market growth, etc. - this is a more dubious argument.

Sometimes it's due to a .

See : | | | | | | | | | | | |


 



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