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Dynamics of organizational communities and technological bandwagons: An empirical investigation of community evolution in the microprocessor market
Author(s) -
Wade James
Publication year - 1995
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.4250160920
Subject(s) - bandwagon effect , network effect , industrial organization , externality , business , technological change , phenomenon , marketing , economics , microeconomics , physics , quantum mechanics , political science , law , macroeconomics
In industries characterized by positive network externalities, the market success of a technology or design arises not simply because of its technological superiority, but from the level of organizational support that the technology attracts. Understanding the rate at which competing technologies gain organizational support is quite important because it yields insight into the factors that start technological bandwagons rolling or, correspondingly, bring them to a stop. I investigate this issue using data on all merchant producers of microprocessors from 1971 to 1989. I find that a community‐level framework is useful in understanding this bandwagon phenomenon and I explore strategic and theoretical implications for industries characterized by network externalities and increasing returns.