The Impact of Bifurcation on Platform Outcomes in a Q&A Community

Department of Decision Sciences and Managerial Economics

This paper studies platform bifurcation, the process in which a subgroup of users from an original platform launches an independent spin-off platform. We identify the effects of bifurcation using a difference-in-differences approach that exploits the introduction of spin-off platforms in an online platform incubator. We find that bifurcation leads to a strong overall increase in contributions. While contributions to the home platform decline, the two bifurcated platforms generate more combined user contributions and attract more new users compared to a single united platform. We further explore how interconnectivity and platform differentiation affect users’ choice of platform. Our evidence indicates that users are less likely to migrate from an incumbent platform to a new, specialized platform when interconnectivity is strong but more likely to migrate when the specialized platform enables more differentiation. This paper is the first to empirically analyze the strategic implications of new platform entry at scale and to document the moderating role of interconnectivity and platform differentiation.