Claussen, Jörg; Kretschmer, Tobias; Spengler, Thomas - Centre for Economic Performance, LSE - 2012
maintain an advantage over potential entrants. We study if backward compatibility moderates this process of rebuilding an … installed base. Using a structural model of the U.S. market for handheld game consoles, we show that backward compatibility lets … software. We examine the tradeoff between technological progress and backward compatibility and find that backward …