Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/27320
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dc.contributor.authorSuleymanova, Irinaen_US
dc.contributor.authorWey, Christianen_US
dc.date.accessioned2008-07-09en_US
dc.date.accessioned2009-08-06T13:20:05Z-
dc.date.available2009-08-06T13:20:05Z-
dc.date.issued2008en_US
dc.identifier.urihttp://hdl.handle.net/10419/27320-
dc.description.abstractWe analyze market dynamics under Bertrand duopoly competition in industries with network effects and consumer switching costs. Consumers form installed bases, repeatedly buy the products, and differ with respect to their switching costs. Depending on the ratio of switching costs to network effects, our model generates convergence to monopoly as well as market sharing as equilibrium outcomes. Convergence can be monotone or alternating in both scenarios. A critical mass effect, where consumers are trapped into one technology for sure only occurs for intermediate values of switching costs, whereas for large switching costs market sharing is the unique equilibrium and for small switching costs both monopoly and market sharing equilibria emerge. We also analyze stationary and stable equilibria, where we show that a monopoly outcome is almost inevitable, if switching costs or network effects increase over time. Finally, we examine firms' incentives to make their products compatible and to create additional switching costs.en_US
dc.language.isoengen_US
dc.publisher|aDeutsches Institut für Wirtschaftsforschung (DIW) |cBerlinen_US
dc.relation.ispartofseries|aDIW Discussion Papers |x796en_US
dc.subject.jelL13en_US
dc.subject.jelD43en_US
dc.subject.jelL41en_US
dc.subject.ddc330en_US
dc.subject.keywordNetwork effectsen_US
dc.subject.keywordswitching costsen_US
dc.subject.keywordBertrand competitionen_US
dc.subject.keywordmarket dynamicsen_US
dc.subject.stwDuopolen_US
dc.subject.stwProduktdifferenzierungen_US
dc.subject.stwNetwork Externalitiesen_US
dc.subject.stwWechselkostenen_US
dc.subject.stwNormungen_US
dc.subject.stwWettbewerben_US
dc.subject.stwMarktstrukturen_US
dc.subject.stwDynamisches Gleichgewichten_US
dc.subject.stwTheorieen_US
dc.titleBertrand competition in markets with network effects and switching costsen_US
dc.type|aWorking Paperen_US
dc.identifier.ppn571537456en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:diw:diwwpp:dp796en_US

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