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Wintel: Cooperation and Conflict

Author

Listed:
  • Ramon Casadesus-Masanell

    () (Harvard Business School, Morgan Hall 233, Soldiers Field Road, Boston, Massachusetts 02163)

  • David B. Yoffie

    () (Harvard Business School, Morgan Hall 215, Soldiers Field Road, Boston, Massachusetts 02163)

Abstract

We study competitive interactions between Intel and Microsoft, two producers of complementary products. In a system of complements, like the PC, the value of the final product depends on how well the different components work together. This, in turn, depends on the firms' investment in complementary R& D. We ask whether Intel and Microsoft will want to cooperate and make the final product as valuable as possible. Contrary to the popular view that two tight complements will generally have well aligned incentives, we demonstrate that natural conflicts emerge over pricing, the timing of new product releases, and who captures the greatest value at different phases of product generations.

Suggested Citation

  • Ramon Casadesus-Masanell & David B. Yoffie, 2007. "Wintel: Cooperation and Conflict," Management Science, INFORMS, vol. 53(4), pages 584-598, April.
  • Handle: RePEc:inm:ormnsc:v:53:y:2007:i:4:p:584-598
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    File URL: http://dx.doi.org/10.1287/mnsc.1060.0672
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    References listed on IDEAS

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    1. Carlsson, Hans & van Damme, Eric, 1993. "Global Games and Equilibrium Selection," Econometrica, Econometric Society, vol. 61(5), pages 989-1018, September.
    2. A. M. Spence, 1981. "The Learning Curve and Competition," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 49-70, Spring.
    3. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Michael Reiss, 2009. "Komplementoren-Integration: Herausforderungen und Lösungskonzepte," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 20(1), pages 43-67, May.
    2. Takey, Silvia Mayumi & Carvalho, Marly M., 2016. "Fuzzy front end of systemic innovations: A conceptual framework based on a systematic literature review," Technological Forecasting and Social Change, Elsevier, vol. 111(C), pages 97-109.
    3. Elizabeth J. Altman & Frank Nagle & Michael L. Tushman, 2013. "Innovating Without Information Constraints: Organizations, Communities, and Innovation When Information Costs Approach Zero," Harvard Business School Working Papers 14-043, Harvard Business School, revised Sep 2014.
    4. Peng Huang & Marco Ceccagnoli & Chris Forman & D.J. Wu, 2009. "Participation in a Platform Ecosystem: Appropriability, Competition, and Access to the Installed Base," Working Papers 09-14, NET Institute, revised Sep 2009.
    5. Ramon Casadesus-Masanell & Gastón Llanes, 2011. "Mixed Source," Management Science, INFORMS, vol. 57(7), pages 1212-1230, July.
    6. Alexandrov, Alexei & Pittman, Russell & Ukhaneva, Olga, 2017. "Royalty stacking in the U.S. freight railroads: Cournot vs. Coase," MPRA Paper 78249, University Library of Munich, Germany.
    7. Niedermayer, Andras, 2013. "On platforms, incomplete contracts, and open source software," International Journal of Industrial Organization, Elsevier, vol. 31(6), pages 714-722.
    8. Casadesus-Masanell, Ramon & Ricart, Joan E., 2007. "Competing through business models," IESE Research Papers D/713, IESE Business School.
    9. Ramon Casadesus-Masanell & Feng Zhu, 2009. "Strategies to Fight Ad-sponsored Rivals," Working Papers 09-09, NET Institute, revised Sep 2009.
    10. repec:bla:stratm:v:38:y:2017:i:10:p:1953-1963 is not listed on IDEAS
    11. Feng Zhu & Qihong Liu, 2014. "Competing with Complementors: An Empirical Look at Amazon.com," Harvard Business School Working Papers 15-044, Harvard Business School, revised Feb 2016.
    12. repec:bla:stratm:v:38:y:2017:i:8:p:1646-1667 is not listed on IDEAS
    13. Casadesus-Massanell, Ramon & Ricart, Joan E., 2009. "Company strategy: Business model reconfiguration for innovation and internationalization," IESE Research Papers D/807, IESE Business School.

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