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incumbent can block entry choosing an empty compatibility interval. At the subgame perfect equilibrium, incompatibility prevails … quality segments and low costs of compatibility. Finally there is no entry if the quality segment is small and the …
Persistent link: https://www.econbiz.de/10005696808
The presence of multiple sellers in the provision of (non-substitutable) complementary goods leads to outcomes that are worse than those generated by an integrated monopoly, a problem also known as the «tragedy of the anticommons». In this paper we identify some conditions under which the...
Persistent link: https://www.econbiz.de/10010786928
We consider a software vendor first selling a monopoly platform and then an application running on this platform. He may face competition by an entrant in the applications market. The platform monopolist can benefit from competition for three reasons. First, his profits from the platform...
Persistent link: https://www.econbiz.de/10011345756
consumers we establish see-saws between consumers and advertisers. Entry of a lower-quality platform increases consumer surplus …, but decreases advertiser surplus if industry platform profits decrease with entry. Merger decreases consumer surplus, but …
Persistent link: https://www.econbiz.de/10011491950
We examine two episodes of strategic interaction in the U.K. betting industry: (i) Betfair (an entrant multi-sided platform, or MSP) vs. Flutter (also an MSP), and (ii) Betfair vs. traditional bookmakers. We find that although Betfair was an underfunded second mover in the betting exchange...
Persistent link: https://www.econbiz.de/10012019905
, and too little entry occurs. …
Persistent link: https://www.econbiz.de/10010307048
, and too little entry occurs. …
Persistent link: https://www.econbiz.de/10009367916
We extend the theory of advertising as a quality signal, using a model where an entrant can choose to advertise by comparing its product to that of an established incumbent. Comparative advertising, comparing quality of one’s own product to that of a rival’s, empowers the latter to file for...
Persistent link: https://www.econbiz.de/10005007232
vertical product differentiation and entry. Both firms face fixed set-up costs and quality-dependent costs of production, and … compete on quality and price. With identical quality-dependent costs, the incumbent will always deter entry if possible, i ….e. if fixed costs are high. Quality will be set at a level lower than the optimal quality set if entry was accommodated. If …
Persistent link: https://www.econbiz.de/10005504715
This paper analyzes decisions on (in)compatibility and product design of two competing hardware suppliers in the presence of network effects. We show that they either establish compatibility and differentiate their variants strongly or maintain incompatibility and locate their variants at the...
Persistent link: https://www.econbiz.de/10010305070