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R&D incentives in compatible networks

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  • Eirik Kristiansen
  • Marcel Thum

Abstract

Network externalities describe the phenomenon that a good becomes more valuable to each user the more other consumers use the same of a compatible product. Whereas most of the recent literature on network effects has focused on the adoption of products, this paper shows that network externalities can have important feedback effects on the incentives to carry out R&D and develop new products.

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File URL: http://hdl.handle.net/10.1007/BF01239059
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Bibliographic Info

Article provided by Springer in its journal Journal of Economics Zeitschrift für Nationalökonomie.

Volume (Year): 65 (1997)
Issue (Month): 1 (February)
Pages: 55-78

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Handle: RePEc:kap:jeczfn:v:65:y:1997:i:1:p:55-78

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Web page: http://www.springerlink.com/link.asp?id=108909

Related research

Keywords: network externalities; innovation; L10; O31; D43;

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References

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  1. Konrad, Kai A, 1994. "The Strategic Advantage of Being Poor: Private and Public Provision of Public Goods," Economica, London School of Economics and Political Science, vol. 61(241), pages 79-92, February.
  2. Harold M. Groves, Chairman, Universities-National Bureau Committee for Economic Research, 1962. "The Rate and Direction of Inventive Activity: Economic and Social Factors," NBER Books, National Bureau of Economic Research, Inc, number univ62-1, October.
  3. Joseph Farrell & Garth Saloner, 1984. "Standardization, Compatibility and Innovation," Working papers 345, Massachusetts Institute of Technology (MIT), Department of Economics.
  4. Choi, J.P., 1996. "Market Structure and the Timing of Technology Adoption with Network Externalities," Discussion Papers 1996_06, Columbia University, Department of Economics.
  5. repec:fth:coluec:9596-07 is not listed on IDEAS
  6. Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-306, December.
  7. James A. Brander & Barbara J. Spencer, 1983. "Strategic Commitment with R&D: The Symmetric Case," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 225-235, Spring.
  8. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  9. Kristiansen, Eirik Gaard, 1996. "R&D in markets with network externalities," International Journal of Industrial Organization, Elsevier, vol. 14(6), pages 769-784, October.
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Citations

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Cited by:
  1. Heli Koski & Tobias Kretschmer, 2004. "Survey on competing in network industries : firm strategies, market outcomes, and policy implications," LSE Research Online Documents on Economics 803, London School of Economics and Political Science, LSE Library.
  2. Ho-Chyuan Chen & Chien-Chen Chen, 2011. "Compatibility Under Differentiated Duopoly with Network Externalities," Journal of Industry, Competition and Trade, Springer, vol. 11(1), pages 43-55, March.
  3. Christian Wey, 1999. "Compatibility Investments in Duopoly with Demand Side Spillovers under Different Degrees of Cooperation," CIG Working Papers FS IV 99-02, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG), revised Aug 1999.
  4. Suleymanova, Irina & Wey, Christian, 2010. "On the role of consumer expectations in markets with network effects," DICE Discussion Papers 13, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

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