Why Unbundling Works: An Impact of Mobile App Unbundling on New App Adoption and Engagement Volume.

In this study, we examine the effect of mobile app unbundling on new app adoption and post-adoption engagement from the perspective of path dependency theory that views unbundling results as a function of users' pre-unbundling experiences. To identify the impact of unbundling on individual usage behavior, we exploit a natural experiment in which one app unbundles a feature and launches it as a new app while another app keeps the bundled app. Our results provide empirical evidences of a causal relationship between mobile app unbundling and users' adoption decisions and post-adoption engagements. First, we find robust evidence that unbundling on average generates user churn while enhancing adopters' post-adoption engagement volume. Second, we find that usage regularity and the recency effect facilitate the unbundling results. Our findings elucidate adoption and post-adoption engagement mechanisms in a mobile app unbundling context, enabling targeting schemes that mobile app providers can utilize. [ABSTRACT FROM AUTHOR]