Mix-and-Match Compatibility in Asymmetric System Markets
This paper shows that the private incentive for mix-and-match compatibility in system markets diverges from the social planner's incentive if competing suppliers are asymmetric in production cost or product quality. There can be too much or too little compatibility when the market is served by fully integrated system suppliers. Also, the market outcome involves socially too much incompatibility in the form of exclusive technological alliances when the market is composed of independent component suppliers. These results contrast with the standard one obtained in the symmetric setup and shed new light on public policy towards compatibility, technological alliances, and bundling practices in system markets.
Volume (Year): 168 (2012)
Issue (Month): 2 (June)
|Contact details of provider:|| Web page: http://www.mohr.de/jite|
|Order Information:|| Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany|
When requesting a correction, please mention this item's handle: RePEc:mhr:jinste:urn:sici:0932-4569(201206)168:2_311:mciasm_2.0.tx_2-g. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Wolpert)
If references are entirely missing, you can add them using this form.