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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.

Suggested Citation

  • Matutes, Carmen & Regibeau, Pierre, 1989. "Standardization across Markets and Entry," Journal of Industrial Economics, Wiley Blackwell, vol. 37(4), pages 359-371, June.
    • Handle: RePEc:bla:jindec:v:37:y:1989:i:4:p:359-71
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    Citations

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    Cited by:

    1. María Fernanda Viecens, 2009. "Compatibility with Firm Dominance," Working Papers 2009-12, FEDEA.
    2. Miao, Chun-Hui, 2010. "Consumer myopia, standardization and aftermarket monopolization," European Economic Review, Elsevier, vol. 54(7), pages 931-946, October.
    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. Viecens María Fernanda, 2011. "Compatibility with Firm Dominance," Review of Network Economics, De Gruyter, vol. 10(4), pages 1-27, December.
    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. Paul Belleflamme & Eric Toulemonde, 2003. "Product differentiation in successive vertical oligopolies," Canadian Journal of Economics, Canadian Economics Association, vol. 36(3), pages 523-545, August.
    8. van Wegberg, M.J., 1995. "Architectural battles in the multimedia market," Research Memorandum 008, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    9. Vamosiu, Adriana, 2018. "Compatibility and bundling of stand and No stand-alone use complements," International Journal of Production Economics, Elsevier, vol. 201(C), pages 62-74.
    10. Shy, O. & Chou, C-F., 1990. "Partially Compatible Brands And Consumer Welfare," Papers 34-90, Tel Aviv.
    11. 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.
    12. Paul Belleflamme & Eric Toulemonde, 2003. "Product differentiation in successive vertical oligopolies," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 36(3), pages 523-545, August.

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