The network effect is the general principle that the value of connecting to a network depends on the number of existing customers in the network. Usually, the network effect makes strong firms stronger and weak firms weaker. In e-commerce, however, the power of network effects can be mitigated when users adopt multiple transaction platforms (i.e., multiple adoption). Owing to multiple adoption, emerging firms have a chance to compete with or surpass strong incumbents. This empirical study showed that, because of multiple adoption, smaller players can still exist in the face of a dominant player in China’s competitive online auction platforms.
Tseng, Fan-Chen; Zeng, C.-F.; and Chen, Y.-S., "Understanding Multiple Adoption in C2C Platforms in China" (2012). ICEB 2012 Proceedings. 7.