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Platform competition in the tablet PC market: The effect of application quality

Author

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  • Doan, Thanh
  • Manenti, Fabio M.
  • Mariuzzo, Franco

Abstract

The tablet PC market is dominated by two platforms: iOS and Android. In this paper, we combine tablet-level data with data on the quality of the top 1000 mobile applications from these platforms and estimate a structural demand model. We exploit variations over three periods and five European countries to find whether the application quality affects tablet demand. We then run two counterfactuals. The first counterfactual suggests that an improvement in application quality benefits the tablet producers on that platform with a more pronounced effect on the demand for Android-based tablets. The second counterfactual discusses the policy of leveling the app quality of the two stores. It shows that such a policy favors the tablet producers adopting the lowest quality app store (Google) and stimulates the adoption of tablet PCs. This generates consumer surplus in tablet demand.

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  • Doan, Thanh & Manenti, Fabio M. & Mariuzzo, Franco, 2023. "Platform competition in the tablet PC market: The effect of application quality," International Journal of Industrial Organization, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:indorg:v:88:y:2023:i:c:s0167718723000115
    DOI: 10.1016/j.ijindorg.2023.102930
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    Keywords

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    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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