Increasing returns to adoption: a multilevel approach
Résumé
The success of new products in certain industries might depend on decisions made in the early stages of their introduction to their respective markets. We identify three strategic choices to be considered by industries with increasing returns to adoption and where network externalities play an important role in adopting a technology: first users, compatibility and timing of the launching process. A series of definitions is first provided in order to combine institutional theory and a resource based view with the literature on network externalities. Increasing returns to adoption is then identified from three different perspectives: consumer, firm and institutional. A number of propositions are introduced for each level considering the three strategic choices previously identified. We therefore, propose a framework which is intended to become a comprehensive tool in making decisions in the specific institutional environment with increasing returns to adoption.