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Standardization across Markets and Entry

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Author Info
Matutes, Carmen
Regibeau, Pierre

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Abstract

In many industries, consumers combine several components to build their own "system." This paper analyzes the incentives to standardize among firms selling a single component to consumers who have already acquired the rest of the system. By selling a component that can work with different systems, a firm credibly commits itself to charging the same price in all the submarkets. It is shown that this can be an optimal strategy for an incumbent who wants to restrict the scope of entry. Copyright 1989 by Blackwell Publishing Ltd.

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Publisher Info
Article provided by Blackwell Publishing in its journal Journal of Industrial Economics.

Volume (Year): 37 (1989)
Issue (Month): 4 (June)
Pages: 359-71
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Handle: RePEc:bla:jindec:v:37:y:1989:i:4:p:359-71

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. María Fernanda Viecens, 2009. "Compatibility with Firm Dominance," Working Papers 2009-12, FEDEA. [Downloadable!]
  2. Nicholas Economides, 1995. "The Economics of Networks," Working Papers 94-24, New York University, Leonard N. Stern School of Business, Department of Economics, revised Sep 1995. [Downloadable!]
    Other versions:
  3. Backhaus,J.G., 1995. "An economic analysis of constitutional law," Research Memoranda 011, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
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