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Standardization across Markets and Entry

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  • Matutes, Carmen
  • Regibeau, Pierre

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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Bibliographic Info

Article provided by Wiley Blackwell 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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Cited by:
  1. Matutes, Carmen & Regibeau, Pierre, 1996. "A selective review of the economics of standardization. Entry deterrence, technological progress and international competition," European Journal of Political Economy, Elsevier, vol. 12(2), pages 183-209, September.
  2. Paul Belleflamme & Eric Toulemonde, 2000. "Product Differentiation in Successive Vertical Oligopolies," Working Papers 421, Queen Mary, University of London, School of Economics and Finance.
  3. van Wegberg, Marc, 2004. "Compatibility choice by multi-market firms," Information Economics and Policy, Elsevier, vol. 16(2), pages 235-254, June.
  4. Nepelski, Daniel, 2009. "Value chain structure and �exible production technologies," MPRA Paper 26236, University Library of Munich, Germany.
  5. Wegberg,Marc,van, 1995. "Architectural battles in the multimedia market," Research Memorandum 008, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  6. Nicholas Economides, 1997. "The Economics of Networks," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco, vol. 1(0), December.
  7. Miao, Chun-Hui, 2010. "Consumer myopia, standardization and aftermarket monopolization," European Economic Review, Elsevier, vol. 54(7), pages 931-946, October.
  8. María Fernanda Viecens, 2009. "Compatibility with Firm Dominance," Working Papers 2009-12, FEDEA.

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