Platform Compatibility and Developer Multihoming: A Tradeoff Perspective

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16369
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Abstract

Digital platform ecosystem features inter-platform competition. A potential strategy for a platform
with market disadvantage is to make itself compatible with competitors to attract multihoming of developers.
However, many questions are unresolved regarding how a platform’s compatibility strategy impacts developers’
multihoming decisions and subsequent app performance. In this study, we use the context of web browser
platforms (i.e., Firefox and Chrome) to investigate how the increase of technological compatibility by a
secondary platform (Firefox) influences developer multihoming from a primary dominant platform (Chrome).
We theoretically consider how increased platform compatibility influences the tradeoffs in developers’
multihoming decisions and their subsequent app development choices. Based on this tradeoff perspective, we
posit and empirically investigate the effects of increased platform compatibility on developer multihoming, and
the subsequent development choices and app performance resulting from multihoming. Our findings illustrate
that developers with larger user bases on the primary platform are more willing to multihome than those with
smaller bases, but increased platform compatibility reduces this gap and enables developers with smaller user
bases to better embrace multihoming. Increased platform compatibility also encourages multihoming developers
to develop exclusive apps for the secondary platform. Moreover, increased platform compatibility facilitates
multihoming developers to leverage their primary-platform user bases to enhance their secondary-platform app
performance, and this effect is influenced by the development type (porting or exclusive development). Our
study generates unique insights that add to the theoretical understanding of platform compatibility, multihoming,
and platform competition.

Additional Details
Author Jing Tian, Xia Zhao, and Ling Xue
Year 2022
Volume Preprints
Issue Preprints
Keywords Platform compatibility, two-sided markets, network externalities, multihoming, exclusive app development, platform competition
Page Numbers
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