Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/94005 
Authors: 
Year of Publication: 
2009
Series/Report no.: 
SFB/TR 15 Discussion Paper No. 257
Publisher: 
Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY), München
Abstract: 
This paper examines how quality incentives are related to the interoperability of competing platforms. Platforms choose whether to operate standardised or exclusively, prior to quality and subsequent price competition. We find that platforms choose a common standard if they can coordinate their quality provision. The actual investment then depends on the cost of quality provision: If rather high, platforms refrain from investment; if rather low, platforms maintain vertically differentiated platforms. The latter case is socially more desirable than exclusivity where platforms do not invest. Nevertheless, quality competition of standardised platforms induces the highest investment and maximum welfare.
Subjects: 
two-sided markets
standards
investment in transaction quality
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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