Compatibility Choices under Switching Costs

Jeon, Doh-Shin, Menicucci, Domenico and Nasr, Nikrooz (2016) Compatibility Choices under Switching Costs. TSE Working Paper, n. 16-691

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Official URL: http://tse-fr.eu/pub/30706

Abstract

e study firms’ compatibility choices in the presence of consumers’ switching costs. We analyze both a model of once-and-for-all compatibility choices and that of dynamic choices. Contrary to what happens in a static setting in which firms embrace compatibility to soften the current competition (Matutes and Régibeau, 1988), when consumer lock-in arises due to a significant switching cost, firms make their products incompatible in order to soften future competition, regardless of the model we consider. This reduces consumer surplus and social welfare.

Item Type: Monograph (Working Paper)
Language: English
Date: September 2016
Uncontrolled Keywords: Compatibility, Incompatibility, Switching Cost, Lock-in
JEL codes: D43 - Oligopoly and Other Forms of Market Imperfection
L13 - Oligopoly and Other Imperfect Markets
L41 - Monopolization; Horizontal Anticompetitive Practices
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse Capitole
Site: UT1
Date Deposited: 06 Sep 2016 08:15
Last Modified: 17 May 2019 14:53
OAI ID: oai:tse-fr.eu:30706
URI: http://publications.ut-capitole.fr/id/eprint/22344

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