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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
    DOI: 10.1287/mnsc.1060.0672
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    References listed on IDEAS

    as
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    3. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
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