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Title:Compatibility and product design in software markets PDF Logo
Authors:Woeckener, Bernd
Issue Date:1999
Series/Report no.:Tübinger Diskussionsbeiträge 173
Abstract:This paper analyzes the interplay between compatibility and product design decisions in a symmetric software duopoly with network effects. We show that suppliers do not always offer differentiated product designs and compete within the market. Rather, when ever both the significance of the network effects and the costs of compatibility are high, they offer homogeneous and incompatible variants and compete for the market, although this leads to Bertrand competition with zero profits. Moreover, we show that given our symmetric setting, antitrust authorities should never intervene against incompatibility, whereas compatibility arrangements should always be under their scrutiny.
Persistent Identifier of the first edition:urn:nbn:de:bsz:21-opus-21014
Document Type:Working Paper
Appears in Collections:Tübinger Diskussionsbeiträge, Universität Tübingen

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