Network externalities, complementarities, and invitations to enter
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TL;DR: In this article, the authors discuss the incentive of an exclusive holder of a technology to share it with competitors in a market with network externalities and show that if the network effect is sufficiently strong, a quantity leader has an incentive to invite entry and license his technology without charge.
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About: This article is published in European Journal of Political Economy. The article was published on 01 Sep 1996. and is currently open access. The article focuses on the topics: Cournot competition & Lump sum.
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Citations
The Economics of Networks
TL;DR: In this article, the authors analyze the salient features of networks and point out the similarities between the economic structure of network and the structure of vertically related industries, focusing on positive consumption and production externalities, commonly called network externalities.
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The Economics of Networks
TL;DR: In this article, the authors analyze the salient features of networks and point out the similarities between the economic structure of network and the structure of vertically related industries, focusing on positive consumption and production externalities, commonly called network externalities.
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Coordination and Lock-In: Competition with Switching Costs and Network Effects
TL;DR: In this paper, the authors argue that even inefficient incompatible competition is often more profitable than compatible competition, especially for dominant firms with installed-base or expectational advantages, and therefore favor thoughtfully pro-compatibility public policy.
Coordination and Lock-In: Competition with Switching Costs and Network Effects
Joseph Farrell,Paul Klemperer +1 more
TL;DR: In this paper, the authors argue that even inefficient incompatible competition is often more profitable than compatible competition, especially for dominant firms with installed-base or expectational advantages, and therefore favor thoughtfully pro-compatibility public policy.
Open Platform Strategies and Innovation: Granting Access vs. Devolving Control
TL;DR: Using data on 21 handheld computing systems, it is found that granting greater levels of access to independent hardware developer firms produces up to a fivefold acceleration in the rate of new handheld device development, depending on the precise degree of access and how this policy was implemented.
References
Monopolistic competition with outside goods
TL;DR: In this article, a model of spatial competition in which a second commodity is explicitly treated is presented, and it is shown that a zero-profit equilibrium with symmetrically located firms may exhibit rather strange properties.
Standardization, compatibility, and innovation
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TL;DR: In this article, the authors examine whether standardization benefits can trap an industry in an obsolete or inferior standard when there is a better alternative available, and discuss the extent to which the problem can be overcome by communication.
A theory of interdependent demand for a communications service
TL;DR: In this paper, the authors define an equilibrium user set as a set of users consistent with all individuals' (users and nonusers) maximizing their utilities, and derive general properties of equilibrium user sets.
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Technology transfer under asymmetric information
Nancy Gallini,Brian D. Wright +1 more
TL;DR: In this paper, conditions under which exclusive license contracts (linear and non-linear) and nonexclusive linear contracts are used to transfer technology are identified, and it is shown that a licensor signals her technology type with an output-based payment (or royalty) and may leave some of the rents with the licensee.
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