Understanding The Impact Of Online Social Networks On Disruptive Innovation

In this paper we explore the state of current knowledge about online social networks (OSNs), and their role in precipitating changes in existing market structures. We do so by reviewing more than 30 recent papers from top-ranked journals in the relevant fields of study. We begin by providing a comprehensive explanation of OSN antecedents that lead to innovation and subsequently to change in market structure. We also provide a novel definition of market structure, and show that disruptive innovation can be regarded as the subset of the innovation space that leads to shifts in market structures. Next, we analyze the process in which innovation in the OSNs disrupt existing market structures. We also show that OSNinduced changes in the market structure usually fall within one of the four categories: changes in transaction costs, bargaining positions, appropriability, and incentives. Finally, we build a framework of a market disruption process and conclude with the delineation of interesting areas for future research.