Speaker: 薛沁舒 (上海交通大学)
Time: 2026-04-11 13:40-14:15
Location: Auditorium Hall, Level 18, SIMIS
Zoom Meeting ID: 898 9915 3556 (Passcode: SIMIS)
Abstract:
Firms increasingly leverage proprietary social networks as a core product character- istic to entrench market power, yet empirical evidence on how these design choices shape competition remains scarce. We study this dynamic in the Chinese kids smartwatch market from 2015 to 2023, where brands developed unique chat apps fostering closed, exclusive networks. Our findings show that larger exclusive networks boost product sales and subsequently increase brand-level prices. In 2019, the entry of a third-party leading Chinese social networking platform –Tencent’s QQ/WeChat – offered a nat- ural experiment in cross-brand connectivity. Difference-in-differences analysis shows platform access raises prices by 5 percent with a limited effect on sales. A structural model disentangles exclusive and compatible networks, revealing consumers value both. Counterfactuals indicate full platform coverage requires massive subsidies ($4.4–$19.1 million) for minimal consumer surplus gains and negligible impact on XTC’s domi- nance. However, bilateral alliances among rival brands can amplify platform effects indirectly, potentially eroding the leader’s position over time. These findings highlight the potency of proprietary networks as competitive barriers and the practical challenges of using interoperability to discipline tipping markets.
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