There is increasing empirical and experimental evidence that providing financial incentives to agents to perform certain socially desirable actions may permanently reduce other types of motivations to undertake these actions. We study the impact of financial incentives on the desire for social...

We analyze whether and how the fact that products are not sold on free, public platforms but on competing for-profit platforms affects sellers? investment incentives. Investments in cost reduction, quality, or marketing measures are here the joint and coordinated efforts by sellers. We show...

In this paper, we investigate dynamic price competition when firms strategically interact in two distinct but interrelated markets: a primary market and an aftermarket, where indirect network effects arise. We set up a differential game of two-dimensional price competition and we conclude that...

This paper analyzes a dynamic mixed duopoly in which a profit-maximizing competitor interacts with a competitor that prices at zero (or marginal cost), with the cumulation of output affecting their relative positions over time. The modeling effort is motivated by interactions between Linux, an...

Based on the critical assumption of strategic complementarity, this paper builds a general model to describe and solve the screening problem faced by the monopolist seller of a network good. By applying monotone comparative static tools, we demonstrate that the joint presence of asymmetric...

Software platforms are a critical component of the computer systems underpinning leading– edge products ranging from third– generation mobile phones to video games. After describing some key economic features of computer systems and software platforms, the paper presents case studies of...

The traditional argument that shorter product cycles favor trade secret over patenting is reviewed. A game theoretic model provides an argument that shorter product cycles can induce firms to file more patent applications. The firms may be trapped in a prisoners' dilemma where all firms would...

This paper analyzes the regional dimension of the German digital divide. It studies the determinants of home Internet use in Germany on the level of counties as well as on the level of individuals. Based on two large data sets, the analyses show that population density itself cannot explain...

We study the ability of banks and merchants to influence the consumer's payment instrument choice. Consumers participate in payment card networks to insure themselves against three types of shocks| income, theft, and their merchant match. Merchants choose which payment instruments to accept...