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First-mover incentive

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Definition Edit

The first-mover incentive (also called the first-mover advantage) refers to the the incentive/advantage that the first entity that offers a particular technology has over its competitors.

Overview Edit

For an ISV interested in attracting users, there may be an advantage to offering the first and, for a while, only application in its category that runs on a new PC operating system. The user base of the new system may be small, but every user of that system who wants such an application will be compelled to use the ISV’s offering. Moreover, if demand for the new operating system suddenly explodes, the first mover will reap large sales before any competitors arrive. An ISV thus might be drawn to a new PC operating system as a "protected harbor."[1]

"The initial occupant of a market segment may benefit from a number of advantages such as preemption of resources, advantageous relationships with customers and suppliers, and early profits for re-investment in infrastructure."[2]

References Edit

  1. United States v. Microsoft Corp., 65 F.Supp.2d 1, 12 (D.D.C. 1999) (full-text) (Finding of Fact 42).
  2. Spectrum Policy in the Age of Broadband: Issues for Congress, at 11 n.62.

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