Talk:Strategy for Information Markets/Dynamic Competition

getting started
You're working with a page that had a little bit of a start previously. I think the material that was there for a start can provide you with some good ideas on how to progress, but use it as much or as little as you think is helpful. Because there's pre-existing material, it's harder for me to tell for your group whether you have a good direction. If you feel you need advice to get started, ask me.

A couple notes:
 * As I think you've noticed, "systemic lock-in" is another way of saying "collective lock-in". Use whichever you prefer, or both, but make it clear.
 * Your example of Blackboard and D2L could be good, but be careful, for two reasons. First, this isn't intended just for a UA audience, so it should be put together in a way which makes sense and is interesting to people outside this university. Second, it's not clear that this is a good illustration of collective lock-in. A classic instance of collective lock-in would have everybody using the same (inferior) system because they're coordinating on it. You describe a situation where UA departments are failing to coordinate on either system. There's probably layers at which this is collective lock-in (within departments, there's coordination on D2L) and other layers at which this is individual lock-in (if you consider a department as an individual).
 * Chapters 5 and 6 of Information Rules are about lock-in. We'll get to reading them as a class, so if you read ahead it can only help you.
 * Keep an eye and some thoughts on Strategy_for_Information_Markets/Compatibility_and_Standards, since that's closely related to lock-in.
 * Think about how a business might overcome lock-in (if the lock-in is helping their rival).
 * Make sure you get comfortable with the game theory of coordination games-whether you use it explicitly in the writing or not, it's critical for understanding collective lock-in. TDang (talk) 13:29, 28 September 2010 (UTC)

coordination games section
I have started working on a section on coordination games. I imagine this section to be a short primer on pure-strategy Nash equilibrium, multiple equilibria, and coordination games. It's background material which is necessary to analyzing collective lock-in.

I don't know how fast I'm going to work on that section. If you want to, anyone in your group may:
 * watch what I do on that page to see if it helps you with your work, or
 * work on that page, since it's necessary background for your work. If you decided to do this, it would count towards your group's contribution to the wikibook even though it's not on the Dynamic competition page.

Actually, I've also started a page for Game trees and backward induction, which is slightly less related, but still important for your topic, so the same things go for that page. TDang (talk) 17:27, 7 October 2010 (UTC)

ECON 452 first midterm class reviews
Please put your reviews for the class assignment here. you may make your review into a sub-section of this section, or just a paragraph. Make sure the reader can identify your review, and make sure to include your signature. TDang (talk) 00:33, 14 October 2010 (UTC)

After reading through your work, it seems like you all have a good grasp on what your project entails and how to relay that to the viewer. You guys have a good foundation at the beginning but then you start to lack on the examples later on in the page. The only thing that was not really wrong but it just looked different was the section for path dependence. There are 4 or 5 titles that say path dependence, a little too cluttered. Other than that, great job! Orngjuce5 (talk) 15:52, 19 October 2010 (UTC)

The introduction could be longer but I like the explanation of switching costs. The long section on switching costs could be two or three paragraphs instead of one long one. All of the explanations make sense so far but it sound boring. Try letting the writing flow more. You could even cut out some of the information on lock-in, because it does not all seem necessary. I think you should elaborate a little more on search costs. There may need to be more citations. I believe you guys could benefit from making your explanation of path dependence longer. Overall, everything I read was good. My last suggestion is to try and relate all your topics more to information markets. Caylor Tornelius (talk) 18:15, 19 October 2010 (UTC)

TDang review
I'm reviewing this version:

First, I know you were starting with pre-existing material. That can be a help or a hindrance. If you think you need to radically edit was was there before, feel free to do so.


 * "The lock-in that stems from these switching costs proves to be a huge competitive advantage for the firms, causing a dispute over "fair" and "unfair" competition tactics" If there's a dispute, it is good to credit it-find someone who talks about the dispute or makes the arguments on one or both sides.
 * "For example, it often takes new Facebook users months to build a substantial network of on-line friends." This sounds like collective switching cost
 * As above, the Blackboard and D2L still looks inappropriate for a general book
 * Mentioning the QWERTY keyboard is almost required now for stuff like this. If you do mention it, you will also need to mention that there's arguments about whether it really shows (inefficient) lock-in. (If you have enough other stuff to do, then I wouldn't require you to add this, I'll probably do it later.)
 * Path Dependence section needs re-writing. I know it's a tricky concept to phrase, but the current phrasing is very confusing
 * I've divided the page into "Demand-driven" and "Supply-driven" dynamic competiton. You have been concentrating on the demand-driven, such as consumer lock-in. That's fine, but you can move into supply-driven as well if you like, including learning economies, limit pricing, suck costs, etc.
 * "Information Networks with Systemic Lock-in:" I expect this is just the beginning. It should be elaborated, explaining why they have systemic lock-in. Probably fewer examples are needed, but well-explained.

General comments: There's plenty of good material on this page. It still needs polish, and elaborating. Showing game trees / game\ matrices / graphics for some of the material mentioned would help. Some additional comments are below. TDang (talk) 17:00, 20 October 2010 (UTC)

Some additional ideas
Here's some thoughts on stuff which could be part of this module.

First, the focus so far has been on the demand-side, individual and collective lock-in. Dynamic competition also happens for the supply-side, and that could be considered. Some supply-side issues for dynamic competition:
 * limit pricing
 * penetration pricing, particularly for pre-emption
 * any kind of commitment strategy, often relating to sunk costs

There are various information-market specific things which can affect individual lock-in:
 * EULA's, "terms of service", these are kinds of contracts which can sometimes cause greater individual lock-in
 * SaaS "software as a service", remote document storage

Something which really should be part of the article, for individual lock-in is that consumers might respond to anticipated lock-in by having lower demand for the good.

This would take some research, but would be a good addition: does lock-in promote high or low market concentration, and under what circumstances? TDang (talk) 17:58, 19 October 2010 (UTC)

ECON 452 second midterm class reviews
Please put your reviews for the class assignment here. You may make your review into a sub-section of this section, or just a paragraph. Make sure the reader can identify your review, and make sure to include your signature. TDang (talk) 17:30, 4 November 2010 (UTC)

Review
After reading your project and going through some previous reviews that made on your project it seems that you guys did progress. I see that you do not have long paragraphs anymore and you make it look nicer and easier to read. One thing that it will be good to use in your paper is more examples as the one with facebook that the professor suggested you. Also i think you should expand more your supply driven. It's a really small section compare to the demand driven. My last advise will be to add more references since you have only two. Overall your paper it looks good and it's on the right track. Nesxes (talk) 07:01, 9 November 2010 (UTC)

Reading the other reviews, this group has continued on top of what another group may have started, however, there are some grammar and flow issues that, I feel if you address, will make this topic much more readable. For example, in the first section (Switching Costs) the word "there" is used when it should be 'their' in almost every usage. Also, some of the sentences are long, very wordy, and some even contain more than one idea making it difficult to follow and understand. The section on Individual Lock-In is much more readable, try to re-write Switching Costs to match the format of Indv Lock-In. There needs to be a source for the opening statement. It is nearly word for word copied from this article: http://www.crai.com/ecp/assets/Dynamic_Competition_and_Aftermarkets.pdf The only other thing I have to say is that the title of this section is Dynamic Competition, but the only place that really comes close to saying what Dynamic Comp is, is that introductory statement which is not even labeled as the definition. All of the information presented is correct and for the most part well said, but it doesn't ever say that this is what does/can occur when companies engage in dynamic competition. Lots of good examples regarding Lock-in etc, but somewhere there should be some sort of paragraph describing that switching costs, lock-in and path dependence are all part of dynamic comp. Renard86 (talk) 07:57, 9 November 2010 (UTC)

I copied this form an edit on the main aricle page: TDang (talk) 16:06, 16 November 2010 (UTC)
 * You all covered the topic very well applying through explanation of your subject, while utilizing good writing, and clear examples. My only suggestions would to make this even better is by applying this knowledge to a current, large scale, dynamic, real life example, and if possible make the writing a little more concise.  This has slight already been accomplished, and might be more work than it is worth.  At this point you all might have reached diminishing returns because your product is fairly finished. Thanks, Rusty

TDang review

 * You need to fix your references.
 * There are some links to Wikipedia articles. Sadly, Wikipedia doesn't qualify as an adequate reference, so these should be replaced by better references (one way to do this is to look at the references the Wikipedia article uses, and select one of them that best makes the point you want to reference).
 * Several of the points from my first review still stand.
 * The note on the Stag Hunt game could be illustrated more substantially by including an example game matrix for the friend-text-messaging example (which needs to be cleaned up some, but is otherwise good).
 * It's good that you've included some material on the QWERTY keyboard. But you need to be more careful about how you do so (see my comments from the first review), and use much better sources (we read some as a class assignment).
 * The path dependence section seems somewhat improved, though it still deserves more.
 * "It can be considered the road map or process of evolution for a market, detailing the history of technological advances a firm has made to reach optimum market share." This is wrong. A "road map" implies that it's something which can be planned, when the point of path-dependence is that it's often based on small bits of randomness (like chaos). It also doesn't necessarily depend on tech advances. Those can be part of it, but path dependence can affect an outcome without any change in the products being offered. I'd suggest just pulling that sentence out.
 * "Large market share holders have something of a closed network when introducing new technologies that do not offer any standardization along with improved advantages." This might be making an important point, or it might just be confused, I'm not sure.

General comments: You have a lot to do, still remaining from the first review. Address those points and continue to develop and clean-up the article.

monopoly/duopoly quote
"...it is better to be a monopolist half the time than a duopolist all the time."

Eastmans review
The section reads well overall, but there are some areas that could use improving. Under "Systematic (collective) lock-in" there is a Facebook/Twitter example that appears slightly dated. Twitter's growing popularity has established Twitter into a dominant player the the social media category, often being referenced in conjunction with Facebook. A clearer example might be between Facebook and Google +. Google + is just starting out and growing, but it's dominance in the social media industry is not as significant as Facebook, and many of the claims about Twitter in this article correlate more to Google + now than to Twitter. Also, Facebook has many more followers now.

Also, I like the QWERTY/Dvorak example, however, the brief history on the Dvorak keyboard seems to interrupt the flow of the page. It would be more appropriate to either have a link on it's history, or have it as a side or footnote.

I believe this page does have a good flow, but it can be improved with clearer sentences that help the reader navigate between topics. In addition, some topics either seem incomplete or having unnecessary information. For example, when talking about first mover advantage, the page states that they can sometimes imply last mover disadvantage, but then they do not elaborate through the rest of the page. Keeping it clear and concise will help the reader.

Overall, this page is clear and explains the information well. If we can correct some outdated examples and can add/subtract information to help with easier flow and navigation of the page, the page will greatly improve. Eastmans (discuss • contribs) 22:18, 5 February 2012 (UTC)


 * I like your suggestions. The QWERTY keyboard example should be kept in this section, because it's one of the most popular examples that has been used in discussing lock-in, even if there are arguments against it being a good example. Perhaps you can figure out better ways to format or phrase it. TDang (discuss • contribs) 21:35, 28 February 2012 (UTC)

Kbhasin87 Review
The section of the Textbook is well written however there were some issues which I think could help improve the section. Firstly there were numerous spelling and grammar mistakes which I have corrected.

I believe the Wikibook is incorrectly titled as Dynamic Competition; I believe a better title would be Lock_In. An important omission that I see with the page is that it does not talk about how many information companies combat Lock In with being able to pull information from other sites such as Facebook or Gmail. An example of this would be signing up for DropBox and instead of setting up all of your personal info you can integrate DropBox to Facebook by clicking the Facebook logo at the sign in page and all of your information will be set up saving a lot of economic resources. Another example of this would be e-mail forwarding. Google used this very effectively when they launched in 2004 by allowing customers to be able to forward email for their previous accounts into their Gmail account.

This helped to circumvent customers lock in to their previous carriers by still allowing them to be able to only check one e-mail address and sending replies from their new inbox which would help to let people know, again saving the customer a lot of time and aggravation.

Lastly while reading the paragraphs on the history of the Dvorak keyboard were interesting. I do not believe that they have a place on this page whether it is titled Dynamic Competition or Lock In.

Kbhasin87 (discuss • contribs) 17:40, 6 February 2012 (UTC)


 * Good thoughts, here are a few responses:


 * As I mentioned above, the competing keyboard formats is one of the often-used examples of lock-in, and so should stay on this page to fit with the way the ideas are frequently treated. But perhaps the way the keyboard stuff is presented could change.
 * "Dynamic Competition" is an important idea and broader than lock-in, so it certainly belongs as a section of the book. A lot of what you describe should be part of this: A business may either try to reduce the lock-in to competing standards, or may take steps with their own standard to make it appealing by convincing customers there won't be much lock-in. However, other kinds of dynamic competition are important as well: Getting an early cost advantage, for instance. TDang (discuss • contribs) 21:40, 28 February 2012 (UTC)

TDang review April 2012
I'm reviewing this version. I'll likely be more critical than complimentary, because (a) that's the way I am and (b) that's what will help improve things. Please don't take the criticism-over-compliments to mean I have a wholly negative view.

Make sure to check the all-purpose review thoughts as well.

TDang (discuss • contribs) 00:05, 30 April 2012 (UTC)
 * Use Wikibooks formatting for subsections, not just bolding subsection titles.
 * "Uncertainty plays a big role in switching as well..."--I think this could go somewhere, but it doesn't right now. This paragraph needs rephrasing, and if it's about undertainty, then the concentration needs to stay on uncertainty.
 * "has too much negative gain "--ther has to be a better way of phrasing this than "negative gain"
 * "Information products work together in systems causing a switch from any single product to be very expensive on the consumer."--This could use elaboration and possibly its own section or paragraph. Since information products are often part of systems of several highly complementary products, switching from one product to another often means switching from one system to another, which is much more costly.
 * "The lock-in that stems from these switching costs proves to be a huge competitive advantage for the firms, causing a dispute over "fair" and "unfair" competition tactics."--Something like this needs references, where a particular company is being highlighted as a monopolist engaged in unfair practices.
 * "Companies like DirectTV..."--This and cellphone carriers are good examples of individual lock-in by contracts, but that belongs down with "contracts".
 * "Microsoft and Apple have both been accused of having incredible switching costs"--I don't think "accused" is a good word here. A company can have high switching costs without having done anything wrong.
 * "These worries and concerns can prove to be a foundation or a cause for change for some firms' competitive strategy."--I don't follow what that means. If it is important, then perhaps it should be taken out of the current paragraph and used as the basis for another piece about strategy?
 * "These are costs are sometimes called search costs."--Move this and its explanation down to the list of individual switching costs.
 * The list(s) of sources of individual switching costs--Try to make it one list, maybe separated into more "natural" and more "artificial", but without a major break in between, so everything can be seen at once. Or possibly a table with "natural" in one column and "artificial" in another (but keeping in mind the distinction between natural and artificial isn't clear-cut).
 * "For example, it often takes new Facebook users months to build a substantial network of on-line friends."--This isn't a very good example for individual lock-in, since it gets the individual time to build a network of friends mixed up with the coordination/collective lock-in aspect of being connected with a lot of friends.
 * "That is, a consumer often cannot recoup his or her investment through arbitrage."--difficulty in reselling is part of individual lock-in, but I don't think "arbitrage" is a good word for it.
 * Lock-in as a negative for sellers--(related to Overcoming competitors' lock-in and Anticipated Lock-in) Don't forget that lock-in can be bad for sellers also, and so sometimes sellers will either help consumers overcome their individual lock-in to previous products ("we'll buy out your contract!") or promise not to lock the consumer into the new product ("90-day money back guarantee!") The reasoning goes like this:
 * I want to get a new consumer to purchase my product...
 * ...but they know once they start using my product they'll be locked in...
 * ...so the consumer doesn't want to even try my product.
 * Stag Hunt Coordination Game--This can link within the book to risky coordination
 * Systemic lock-in--We're sophisticated enough that this bit can refer to being in one Nash equilibrium or one Consumer demand equilibrium of the game have having a hard time colectively switching to a different Nash equilibrium.
 * For the switching text messaging game, it would probably be better to change it to the same format as the game matrices used in the Nash equilibrium page.
 * I like the overall story of the text-message plan, but the numbers don't quite add up, they should be reconsidered.
 * The Qwerty keyboard--This stuff should be rewritten a bit carefully. Here's the trick:
 * This is probably the classic story of path-dependence and collective lock-in.
 * It probably is really a case of path-dependence, and maybe of collective lock-in.
 * However, there is only very weak evidence that the QWERTY keyboard is an inferior standard.
 * So, it might not matter (in terms of economic efficiency) that there was path-dependence and colelctive lock-in.
 * So, we should relay the story, but not put too much weight on its implications.
 * But also, the section shouldn't get much longer than it is.
 * Yeah, I know that's a tricky writing goal.
 * ADP / SAP--Is this example taken from a reference? If so, I'd really like it if it were referenced inline there.
 * Information networks with systemic lock-in:--This is currently just a list, not very informative. Probably it should be removed.
 * "Path dependence is often used in markets"--"used" is the wrong word.
 * "multiple stable equilibrium"--the plural of "equilibrium" is "equilibria".
 * EH.net looks like a great reference.
 * Examples of path dependence--Don't do more QWERTY stuff here, keep it all in one place.
 * The Blu-Ray vs. HD-DVD standards battle is interesting, but needs to be more clearly referenced.
 * "First-movers can preempt production of critical resources for other companies"--This could be true, but let's skip it because it has less to do with information goods.
 * "First-movers can often gain significant market share that competitors have a hard time reducing"--It needs to be explained what's important about market share. A company's goal is typically profits, and market share is only important if it contributes to profits.
 * "In an information market, the first-mover advantage is much often larger than in it would be in a conventional market."--This paragraph is interesting, and probably should be expanded, better rerferenced, and though about more. If there are things which make the market more tippy, that means there's a first-mover advantage, and that includes both supply-side and demand-side economies of scale. On the other hand, imitating the first-mover could allow someone else to enter with a lower investment. Even then, does that matter if the investment is a sunk cost for the first company? Or what if it's impossible to imitate without violating IP laws?
 * References
 * There are a number of links to references throughout this article. Those should be reformatted as Wiki-style references, so they'll appear at the bottom of the page with information, rather than just a link.
 * The references currently at the bottom of the page would be better put into inline references where that information is used.
 * I don't think powertyping.com is a good reference.