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Converters, Compatibility, and the Control of Interfaces

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Author Info
Farrell, Joseph
Saloner, Garth

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Abstract

Converters, emulators, or adapters can often make one technology partially compatible with another. The authors analyze the equilibrium market adoption of otherwise incompatible technologies when such converters are available and the incentives to provide them. While market outcomes without converters are often inefficient, the availability of converters can actually make matters worse. The authors also find that when one of the technologies is supplied only by a single firm, that firm may have an incentive to make conversion costly. This may lend some theoretical support to allegations of anticompetitive disruption of interface standards. Copyright 1992 by Blackwell Publishing Ltd.

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

Volume (Year): 40 (1992)
Issue (Month): 1 (March)
Pages: 9-35
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Handle: RePEc:bla:jindec:v:40:y:1992:i:1:p:9-35

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  1. Alexei Alexandrov, 2008. "Interconnecting Differentiated Networks," Working Papers 08-07, NET Institute, revised Oct 2008. [Downloadable!]
  2. Matthew G. Nagler, 2008. "Network Externalities, Mutuality, and Compatibility," Working Papers 08-37, NET Institute, revised Oct 2008. [Downloadable!]
  3. Anette Boom & Pio Baake, . "Vertical Product Differentiation, Network Externalities, and Compatibility Decisions," Papers 010, Departmental Working Papers. [Downloadable!]
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  4. Jeong-Yoo Kim, 2000. "Product Compatibility And Technological Innovation," International Economic Journal, Korean International Economic Association, vol. 14(3), pages 87-100, October. [Downloadable!] (restricted)
  5. Cantillon, Estelle & Yin, Pai-Ling, 2008. "Competition between Exchanges: Lessons from the Battle of the Bund," CEPR Discussion Papers 6923, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  6. Fabio Maria Manenti & Ernesto Somma, 2008. "One-Way Compatibility, Two-Way Compatibility and Entry in Network Industries," "Marco Fanno" Working Papers 0068, Dipartimento di Scienze Economiche "Marco Fanno". [Downloadable!]
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  7. Nicolas Jonard & Eric Schenk, 2003. "A Duopoly Logit Model with Price Competition and Strategic Compatibility," Annales d'Economie et de Statistique, ADRES, issue 69, pages 07, Janvier-M. [Downloadable!]
  8. Christopher R. Knittel & Victor Stango, 2004. "Incompatibility, Product Attributes and Consumer Welfare: Evidence from ATMs," Working Papers 04-06, NET Institute, revised Oct 2004. [Downloadable!]
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  9. Mathias Dewatripont & Patrick Legros, 2000. "Mergers in Emerging Markets with Network Externalities: The Case of Telecoms," CIG Working Papers FS IV 00-23, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG). [Downloadable!]
  10. Jiawei Chen & Ulrich Doraszelski & Joseph E. Harrington, Jr., 2008. "Avoiding Market Dominance: Product Compatibility in Markets with Network Effects," Economics Working Paper Archive 537, The Johns Hopkins University,Department of Economics. [Downloadable!]
  11. Walz, Uwe & Woeckener, Bernd, 2003. "Compatibility Decisions, Endogenous Installed Home Bases and the Third-Market Competition," CEPR Discussion Papers 3816, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  12. COLLA, Paolo & GARCIA, Filomena, 2004. "Technology adoption with forward looking agents," CORE Discussion Papers 2004041, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
  13. Dogan, Pinar, 2005. "Vertical Networks, Integration, and Connectivity," Working Paper Series rwp05-061, Harvard University, John F. Kennedy School of Government. [Downloadable!]
  14. 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!]
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  15. Frederick R. Warren-Boulton & Kenneth C. Baseman & Glenn A. Woroch, 1994. "The Economics of Intellectual Property Protection for Software: The Proper Role for Copyright," Industrial Organization 9411004, EconWPA. [Downloadable!]
  16. Pehr-Johan Norbäck & Lars Persson & Joacim Tåg, 2008. "Entrepreneurial Innovations in Network Industries," Working Papers 08-02, NET Institute, revised Sep 2008. [Downloadable!]
  17. Irina Suleymanova & Christian Wey, 2008. "On the (Mis-) Alignment of Consumer and Social Welfare in Markets with Network Effects," Discussion Papers of DIW Berlin 794, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  18. Irina Suleymanova & Christian Wey, 2008. "Bertrand Competition in Markets with Network Effects and Switching Costs," Discussion Papers of DIW Berlin 796, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  19. Skrzypacz, Andrzej & Mitchell, Matthew F., 2005. "Network Externalities and Long-Run Market Shares," Research Papers 1879, Stanford University, Graduate School of Business. [Downloadable!]
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  20. Kenneth S. Corts & Mara Lederman, 2007. "Software Exclusivity and the Scope of Indirect Network Effects in the U.S. Home Video Game Market," Working Papers 07-43, NET Institute, revised Nov 2007. [Downloadable!]
  21. Dennis W. Carlton & Robert H. Gertner, 2002. "Intellectual Property, Antitrust and Strategic Behavior," NBER Working Papers 8976, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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