Network effects, compatibility decisions, and horizontal product differentiation

Arbeitspapier

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 center of the consumer distribution. In the latter case, a 'standards war' takes place. Moreover, we show that a commitment to compatibility becomes more attractive for suppliers when it can be done before product designs are fixed because then, it can significantly soften competition in locations. Considering welfare, it turns out that standards wars can be welfare superior to compatibility.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Tübinger Diskussionsbeiträge ; No. 152

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Monopoly; Monopolization Strategies ; Oligopoly and Other Imperfect Markets ; Information and Product Quality; Standardization and Compatibility
• Thema: Computerindustrie ; Normung ; Network Externalities ; Duopol ; Produktdifferenzierung ; Wohlfahrtseffekt ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Woeckener, Bernd
• Ereignis: Veröffentlichung
• (wer): Eberhard Karls Universität Tübingen, Wirtschaftswissenschaftliche Fakultät
• (wo): Tübingen
• (wann): 1999

Weitere Informationen

• Handle: http://hdl.handle.net/10419/47581
• URN: urn:nbn:de:bsz:21-opus-21408
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ