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| Author: | Hogendorn, C. Yuen, S.K.Y. |
| Title: | Platform competition with "must-have" components |
| Journal: | Journal of Industrial Economics
2009 : JUN, VOL. 57:2, p. 294-318 |
| Index terms: | competition monopoly consumers contracts market share |
| Language: | eng |
| Abstract: | In platform-component systems where network effects are indirect, some must-have components are popular enough among consumers to create large, discrete indirect network effects once they become available on a platform. For instance, ESPN is a must-have component of cable TV platforms. This article examines how platform market structures determine exclusive versus non-exclusive contracts between platforms and components, showing that a component provider more likely signs exclusive contracts with a single platform if it has high popularity, large platform market share difference, and low cross-platform indirect network impacts. |
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