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A Dynamic Analysis of Cross-Category Innovation in Digital Platform Ecosystems with Network Effects

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Abstract

Cross-category innovation in digital platform ecosystems is increasingly pivotal for competitive reconfiguration, and the value it generates for users primarily stems from the benefits of network effects. By extending the spatial competition framework of the Hotelling model through a four-stage sequential game comprising category competition, we formalize the strategic mechanism for expanding network effects governing benchmark competition and category dynamics. The cross-category innovation strategy proposed in this paper offers valuable insights in three key areas: investment in core technological advantages, reconstruction of user cognitive boundaries, and strengthening ecological dependency within the ecosystem. By transcending the limitations in the explanatory power of traditional management theories for cross-organizational boundary issues, this study integrates digital contexts into its analytical framework, thus providing a novel perspective for understanding the dynamic processes of cross-category innovation in digital platform ecosystems.

Original languageEnglish
Article number229
JournalJournal of Theoretical and Applied Electronic Commerce Research
Volume20
Issue number3
DOIs
StatePublished - Sep 2025

Keywords

  • cross-category innovation
  • digital platform ecosystems
  • game equilibrium
  • network effects

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