Fortnite is the most successful video game in terms of revenues generated. Since it belongs to the 'free-to-play games', the company has to optimize the in-game-shop to generate revenues. Product dif- ferentiation is one possibility to optimize the profitability of the game. In this paper, we...

I consider a cheap-talk model in which a firm has a chance to communicate its product quality to consumers. The model describes how advertising can be both informative to consumers and profitable for the firm through its content in a vertically differentiated market. I find that advertising...

We determine the incentives for compatibility provision of firms that produce network goods with different intrinsic qualities. We consider the case in which both firms have the power to veto compatibility and the case in which none has this power. We obtain that if consumers have a strong...

This paper presents an analytical model to elucidate the incumbent’s optimal strategy on “vertical repositioning” as a countermeasure against entry. A vertically differentiated market is considered: an entrant enters the market with its quality choice, and then the incumbent responds by...