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Multihoming and compatibility

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  • Doganoglu, Toker
  • Wright, Julian

Abstract

This paper analyzes the consequences of multihoming on private and social incentives for compatibility. Multihoming occurs in our model when consumers buy from both of two competing firms so as to capture network benefits. We address whether the ability of consumers to multihome means policymakers do not need to worry about compatibility between ‘networks’.
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Suggested Citation

  • Doganoglu, Toker & Wright, Julian, 2006. "Multihoming and compatibility," International Journal of Industrial Organization, Elsevier, vol. 24(1), pages 45-67, January.
  • Handle: RePEc:eee:indorg:v:24:y:2006:i:1:p:45-67
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    4. Griva, Krina & Vettas, Nikolaos, 2011. "Price competition in a differentiated products duopoly under network effects," Information Economics and Policy, Elsevier, vol. 23(1), pages 85-97, March.
    5. Mark Armstrong, 2006. "Competition in two‐sided markets," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 668-691, September.
    6. Jean-Charles Rochet & Jean Tirole, 2014. "Platform Competition in Two-Sided Markets," CPI Journal, Competition Policy International, vol. 10.
    7. Armstrong, Mark & Vickers, John, 2001. "Competitive Price Discrimination," RAND Journal of Economics, The RAND Corporation, vol. 32(4), pages 579-605, Winter.
    8. Jeffrey Church & Ian King, 1993. "Bilingualism and Network Externalities," Canadian Journal of Economics, Canadian Economics Association, vol. 26(2), pages 337-345, May.
    9. Caillaud, Bernard & Jullien, Bruno, 2003. " Chicken & Egg: Competition among Intermediation Service Providers," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 309-328, Summer.
    10. de Palma, Andre & Leruth, Luc & Regibeau, Pierre, 1999. "Partial compatibility with network externalities and double purchase," Information Economics and Policy, Elsevier, vol. 11(2), pages 209-227, July.
    11. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-440, June.
    12. repec:reg:rpubli:253 is not listed on IDEAS
    13. Shy,Oz, 2001. "The Economics of Network Industries," Cambridge Books, Cambridge University Press, number 9780521805001.
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    Citations

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    Cited by:

    1. Marc Rysman, 2006. "An Empirical Analysis of Payment Card Usage," Boston University - Department of Economics - Working Papers Series WP2006-002, Boston University - Department of Economics.
    2. Grajek, Michal & Kretschmer, Tobias, 2009. "Usage and diffusion of cellular telephony, 1998-2004," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 238-249, March.
    3. María Fernanda Viecens, 2009. "Compatibility with Firm Dominance," Working Papers 2009-12, FEDEA.
    4. Anderson, Simon P. & Foros, Øystein & Kind, Hans Jarle, 2012. "Product quality, competition, and multi-purchasing," Discussion Papers 2012/9, Norwegian School of Economics, Department of Business and Management Science.
    5. Alexander Rasch, 2007. "Platform competition with partial multihoming under differentiation: a note," Economics Bulletin, AccessEcon, vol. 12(7), pages 1-8.
    6. Doganoglu, Toker & Wright, Julian, 2010. "Exclusive dealing with network effects," International Journal of Industrial Organization, Elsevier, vol. 28(2), pages 145-154, March.
    7. Salim, Claudia, 2009. "Platform Standards, Collusion and Quality Incentives," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 257, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    8. Christiaan Hogendorn, 2007. "Broadband Internet: net neutrality versus open access," International Economics and Economic Policy, Springer, vol. 4(2), pages 185-208, August.
    9. Anderson, Simon P. & Jullien, Bruno, 2016. "The advertising-financed business model in two-sided media markets," TSE Working Papers 16-632, Toulouse School of Economics (TSE).
    10. repec:cuf:journl:y:2018:v:19:i:1:dou:ye is not listed on IDEAS
    11. Kaiser, Ulrich & Wright, Julian, 2006. "Price structure in two-sided markets: Evidence from the magazine industry," International Journal of Industrial Organization, Elsevier, vol. 24(1), pages 1-28, January.
    12. Miao, Chun-Hui, 2011. "Planned obsolescence and monopoly undersupply," Information Economics and Policy, Elsevier, vol. 23(1), pages 51-58, March.
    13. Maruyama, Masayoshi & Zennyo, Yusuke, 2015. "Application compatibility and affiliation in two-sided markets," Economics Letters, Elsevier, vol. 130(C), pages 39-42.
    14. Rattanasuda Poolsombat & Gianluigi Vernasca, 2006. "Partial Multihoming in Two-sided Markets," Discussion Papers 06/10, Department of Economics, University of York.
    15. Jay Pil Choi, 2006. "Tying in Two-Sided Markets with Multi-Homing," Working Papers 06-04, NET Institute, revised Sep 2006.
    16. Chun-Hui Miao, 2010. "TYING, COMPATIBILITY AND PLANNED OBSOLESCENCE -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 58(3), pages 579-606, September.
    17. Griva, Krina & Vettas, Nikolaos, 2011. "Price competition in a differentiated products duopoly under network effects," Information Economics and Policy, Elsevier, vol. 23(1), pages 85-97, March.
    18. repec:ebl:ecbull:v:12:y:2007:i:7:p:1-8 is not listed on IDEAS
    19. Feng Zhu, 2008. "Ad-sponsored Business Models and Compatibility Incentives of Social Networks," Working Papers 08-20, NET Institute, revised Sep 2008.
    20. Rasch, Alexander & Wenzel, Tobias, 2014. "Content provision and compatibility in a platform market," Economics Letters, Elsevier, vol. 124(3), pages 478-481.
    21. Athanasopoulos, Thanos, 2014. "Compatibility, Intellectual Property,Innovation and Welfare in Durable Goods Markets with Network Effects," The Warwick Economics Research Paper Series (TWERPS) 1043, University of Warwick, Department of Economics.
    22. Rasch, Alexander, 2017. "Compatibility, network effects, and collusion," Economics Letters, Elsevier, vol. 151(C), pages 39-43.
    23. repec:eee:iepoli:v:40:y:2017:i:c:p:1-12 is not listed on IDEAS

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