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Compatibility, network effects, and collusion

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  • Rasch, Alexander

Abstract

I consider a market with network effects in which firms collude on prices. Depending on the fixed costs for achieving compatibility, there may be a non-monotone relationship between firms’ decisions to make their products compatible and their intertemporal preferences.

Suggested Citation

  • Rasch, Alexander, 2017. "Compatibility, network effects, and collusion," Economics Letters, Elsevier, vol. 151(C), pages 39-43.
    • Handle: RePEc:eee:ecolet:v:151:y:2017:i:c:p:39-43
    DOI: 10.1016/j.econlet.2016.11.031
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Lefouili, Yassine & Pinho, Joana, 2020. "Collusion between two-sided platforms," International Journal of Industrial Organization, Elsevier, vol. 72(C).
    2. Kangsik Choi & DongJoon Lee, 2022. "Note on collusion with network externalities in price versus quantity competition," International Journal of Economic Theory, The International Society for Economic Theory, vol. 18(4), pages 461-471, December.
    3. Tsuyoshi Toshimitsu, 2018. "Tacit collusion and its welfare effect in a network product market," Economics Bulletin, AccessEcon, vol. 38(4), pages 1787-1795.
    4. Wang, Wei & Lyu, Gaoyan, 2020. "Sequential product positioning on a platform in the presence of network effects," International Journal of Production Economics, Elsevier, vol. 229(C).
    5. Tsuyoshi Toshimitsu, 2017. "Collusion and welfare in the case of a horizontally differentiated duopoly with network compatibility," Discussion Paper Series 163, School of Economics, Kwansei Gakuin University, revised Jun 2017.
    6. Lefouili, Yassine & Pinho, Joana, 2020. "Collusion between two-sided platforms," International Journal of Industrial Organization, Elsevier, vol. 72(C).
    7. Wu, Cheng-Han, 2019. "Licensing to a competitor and strategic royalty choice in a dynamic duopoly," European Journal of Operational Research, Elsevier, vol. 279(3), pages 840-853.

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    More about this item

    Keywords

    Collusion; Compatibility; Network effect; Standard;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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