Showing 1 - 10 of 965
This paper investigates the competition between vertically differentiated platforms in two-sided markets. We assume the presence of two competing platforms producing either higher- or lower-quality devices for consumers. Each platform decides the price of its hardware device for consumers and...
Persistent link: https://www.econbiz.de/10012904109
Market mechanism may or may not throw up compatibility in markets for systems where network effect arises due to complementarity of component parts of a system. We consider a game, where, in stage 1, the firms decide whether to standardise on a single technological platform or not and at the...
Persistent link: https://www.econbiz.de/10014070892
and the possibility of side payments. With incompatibility, entry deterrence occurs for sufficiently strong network …
Persistent link: https://www.econbiz.de/10014029696
specifications, full incompatibility and preemption are again observed at the equilibrium. With incompatibility, entry deterrence …
Persistent link: https://www.econbiz.de/10013124727
This paper considers the collusive stability of downstream competition in a vertical market with network externalities and cost asymmetry. A dynamic collusion game is constructed, and backward induction is employed to solve the subgame perfect Nash equilibrium. We show that larger network...
Persistent link: https://www.econbiz.de/10014422321
The article examines a differentiated-products duopoly model where the firms make entry decisions to two markets and … then choose prices. The effects of product differentiation and entry costs are analyzed in two games: with and without … price discrimination between the markets. Allowing price discrimination encourages more entry and tends to reduce prices and …
Persistent link: https://www.econbiz.de/10005836325
sufficiently high, license without entry strategy is optimum; if the low quality good’s quality is low, both of entry without … license strategy and license without entry strategy are optimum; when cost functions are quadratic, if the high quality good …’s quality is high, license without entry strategy is optimum; if the high quality good’s quality is low, entry with license …
Persistent link: https://www.econbiz.de/10011573193
We analyze the role of consumer expectations in a Hotelling model of price competition when products exhibit network effects. Expectations can be strong (stubborn), weak (price-sensitive) or partially stubborn (a mix of weak and strong). As a rule, the price-sensitivity of demand declines when...
Persistent link: https://www.econbiz.de/10010303797
We analyze Bertrand duopoly competition in markets with network effects and consumer switching costs. Depending on the ratio of switching costs to network effects, our modelerates four different market patterns: monopolization and market sharing which can be either monotone or alternating. A...
Persistent link: https://www.econbiz.de/10010305915
We conducted a laboratory experiment to study the price setting behavior in two-sided markets. We seek to answer two specific research questions: Do participants charge the equilibrium prices that can be derived from a theoretical model? How is the price setting affected by the characteristics...
Persistent link: https://www.econbiz.de/10011825236