Too Many Complementors? Evidence on Software Developers
Résumé
It is often presumed there are benefits from growing numbers of buyers and sellers around a platform, or "network effects." While the benefits of more buyers are self-evident, the effects of ever-increasing numbers of sellers of complementary goods ("complementors") perhaps deserve closer scrutiny. This paper uses point-of-sale data on a textbook example, large numbers of software developers around mobile computing platforms, to show that entry beyond several hundred software firms in fact led to reduced rates of new software development. Platform strategies emphasizing careful regulation of complementor entry would have led to more and possibly better software.