@techreport{Vanberg2005Network,
abstract = {The majority of industrial organizations literature on network externalities looks at firm behavior
under given market characteristics. The present paper instead asks the question whether the
presence of network externalities can change market characteristics, specifically, whether an
initially large market player can decline cooperation (interconnection) with competing network
operators and thereby gain a dominant position when network externalities are significant. The
paper comes to the conclusion that only when a network operator already has network specific
market power due to the ownership of a monopolistic bottleneck network area, will network
externalities enable the operator to increase his market dominance. In competitive markets or in
contestable natural monopolies, however, network externalities will not lend network specific
market power to an initially large operator. In these markets, the market process can be expected to
solve the trade-off between ensuring cooperation between competing operators and at the same
time safeguarding competition in product characteristics and quality of service.},
address = {Mannheim},
author = {Margit A. Vanberg},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {L43; L15; 330; network externalities; interconnection; regulation; Network Externalities; Struktur-Performance-Modell; Industrie\"{o}konomik; Wettbewerbstheorie; Unternehmenskooperation; Normung; Theorie},
language = {eng},
number = {05-80},
publisher = {Zentrum f\"{u}r Europ\"{a}ische Wirtschaftsforschung (ZEW)},
title = {Network Externalities and Interconnection Incentives},
type = {ZEW Discussion Papers},
url = {http://hdl.handle.net/10419/24176},
year = {2005}
}
