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| Author: | Malueg, D.A. Schwartz, M. |
| Title: | Compatibility incentives of a large network facing multiple rivals |
| Journal: | Journal of Industrial Economics
2006 : DEC, VOL. 54:4, p. 527-567 |
| Index terms: | competition networks |
| Freeterms: | compatibility |
| Language: | eng |
| Abstract: | Under network effects, this study analyzes when a company with the largest market share of installed-base customers prefers incompatibility with smaller rivals that are themselves compatible. With incompatibility, consumers realize that intra-network competition makes the rivals' network more aggressive than a single-company network in adding customers. As a consequence, under incompatibility the unique equilibrium can entail tipping away from the largest company whatever its market share. |
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