Appropriability risk and knowledge search on digital platforms

Abstract

Research has rarely studied how innovators conduct knowledge search in response to an increased risk that their original ideas may be imitated (i.e., duplicative imitation threat). We address this gap by focusing on a duplicative imitation threat common to digital platforms, which allows for the entry of pirated software at a low cost with rapid distribution and presents a significant appropriability risk to the original software developers. We treat the jailbreak of Apple's iOS 7 that enabled Apple users to install pirated apps as an exogenous shock that increases such a threat, and adopt a quasi-experiment design in our study. Our empirical analysis shows that after the jailbreak, iOS app developers increase their search depth and reduce their search scope compared to Android app developers. Our findings imply that innovators' adjustment in their knowledge search is contingent upon specific characteristics of the imitation threat they face.