|
Winner Takes All
The winner takes all phenomena, for digital marketplaces, highlights the notion that markets tend to favor the market leader to such an extent, other competitors can be driven out of the marketplace. This is a result of two issues. The network effects and positive spiral experienced by the market leader, making its product more compelling for the consumer, and the learning curve effect and reduced average costs of the market leader, enabling it to potentially reduce prices to a price point with which competitors cannot compete. Markets will tend to tip, and this is when the winner takes all phenomena comes into play.
Similar MatchesWinners curseWinners curse
Problem faced by uninformed bidders. For example, in an initial public offering uninformed participants are likely to receive larger allotments of issues that informed participants know are overpriced.
|
