From Primordial Soup to Platform-Based Competition: Exploring the Emergence of Products, Systems, and Platforms

We use an agent-based NK model to explore the conditions under which standard platforms emerge among competing products. Our findings were inconclusive. We find that the usual Darwinian conditions needed for the emergence of complexity are sufficient to yield a limited reliance upon platforms with a core of common components, simply because evolution causes the population to converge on a set of products that contain combinations that "work well," yielding what we call "coincidental platform emergence." Economies of scale yield more use of common components, or "production platform emergence." Positive participation externalities initially induce the highest degree of platform emergence through "usage platform emergence," but this rapidly degenerates into simple monoculture. We find that lock-in, or freezing on early designs, can occur when variants arrive dynamically and not all choices are initially available, but that the cost is always a small fraction of participation benefits. Finally, we provide some extensions to the NK framework that improve its ability to address issues in system design and the assembly of components into products.