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Jeon, Doh-Shin
, Menicucci, Domenico and Nasr, Nikrooz
(2023)
Compatibility choices, switching costs and data portability.
American Economic Journal: Microeconomics, vol. 15 (n° 1).
pp. 30-73.
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Abstract
We study mix-and-match compatibility choices of firms selling complementary products in a dynamic setting. Contrary to what happens in a static setting where symmetric firms choose compatibility (Matutes and Regibeau 1988), when switching costs are high and firms make price discrimination based on past purchases, symmetric firms choose incompatibility to soften future competition if the discount factor is large, which harms consumers. Interoperability increases consumer surplus at least for high switching costs. Data portability, by reducing switching costs, induces the firms to choose compatibility more often but, given a compatibility regime, benefits consumers only if a nonnegative pricing constraint binds.
| Item Type: | Article |
|---|---|
| Language: | English |
| Date: | February 2023 |
| Refereed: | Yes |
| Place of Publication: | États-Unis |
| JEL Classification: | 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) |
| Site: | UT1 |
| Date Deposited: | 13 Apr 2023 08:51 |
| Last Modified: | 06 Oct 2023 15:00 |
| OAI Identifier: | oai:tse-fr.eu:126563 |
| URI: | https://publications.ut-capitole.fr/id/eprint/44288 |
Available Versions of this Item
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Compatibility choices, switching costs and data portability: on the role of the non-negative pricing constraint. (deposited 06 Sep 2016 08:15)
- Compatibility choices, switching costs and data portability. (deposited 13 Apr 2023 08:51) [Currently Displayed]
