Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/27320 
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dc.contributor.authorSuleymanova, Irinaen
dc.contributor.authorWey, Christianen
dc.date.accessioned2008-07-09-
dc.date.accessioned2009-08-06T13:20:05Z-
dc.date.available2009-08-06T13:20:05Z-
dc.date.issued2008-
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
dc.language.isoengen
dc.publisher|aDeutsches Institut für Wirtschaftsforschung (DIW) |cBerlinen
dc.relation.ispartofseries|aDIW Discussion Papers |x796en
dc.subject.jelL13en
dc.subject.jelD43en
dc.subject.jelL41en
dc.subject.ddc330en
dc.subject.keywordNetwork effectsen
dc.subject.keywordswitching costsen
dc.subject.keywordBertrand competitionen
dc.subject.keywordmarket dynamicsen
dc.subject.stwDuopolen
dc.subject.stwProduktdifferenzierungen
dc.subject.stwNetwork Externalitiesen
dc.subject.stwWechselkostenen
dc.subject.stwNormungen
dc.subject.stwWettbewerben
dc.subject.stwMarktstrukturen
dc.subject.stwDynamisches Gleichgewichten
dc.subject.stwTheorieen
dc.titleBertrand competition in markets with network effects and switching costs-
dc.type|aWorking Paperen
dc.identifier.ppn571537456en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen
dc.identifier.repecRePEc:diw:diwwpp:dp796en

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