Quality improvement and network externalities
We analyse the optimal pricing choice of an incumbent firm that sells a good with network externalities and is threatened by the entry of a higher quality variant. In the framework of a vertical differentiation model, we find a necessary and sufficient condition under which quality improvement occurs as a result of this competition.
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- Gabszewicz, Jean & Pepall, Lynne & Thisse, Jacques-Francois, 1992.
"Sequential Entry with Brand Loyalty Caused by Consumer Learning-by-Using,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 40(4), pages 397-416, December.
- GABSZEWICZ, Jean J. & PEPALL, Lynne & THISSE, Jacques-François, "undated". "Sequential entry with brand loyalty caused by consumer learning-by-using," CORE Discussion Papers RP 1018, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Gabszewicz, J.J. & Pepall, L. & Thisse, J.F., 1992. "Sequential Entry with Brand Loyalty Caused by Consumer Learning-by-Using," Papiers d'Economie MathÃ©matique et Applications 92-17, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Farrell, Joseph & Saloner, Garth, 1986. "Installed Base and Compatibility: Innovation, Product Preannouncements, and Predation," American Economic Review, American Economic Association, vol. 76(5), pages 940-955, December.
- Baake, Pio & Boom, Anette, 2001. "Vertical product differentiation, network externalities, and compatibility decisions," International Journal of Industrial Organization, Elsevier, vol. 19(1-2), pages 267-284, January.
- Anette Boom & Pio Baake, "undated". "Vertical Product Differentiation, Network Externalities, and Compatibility Decisions," Papers 010, Departmental Working Papers.
- Joseph Farrell & Garth Saloner, 1985. "Installed Base and Compatibility With Implications for Product Preannouncements," Working papers 385, Massachusetts Institute of Technology (MIT), Department of Economics.
- Joseph Farrell & Garth Saloner, 1986. "Installed Base and Compatibility, With Implications for Product Preannouncements," Working papers 411, Massachusetts Institute of Technology (MIT), Department of Economics.
- Katz, Michael L & Shapiro, Carl, 1992. "Product Introduction with Network Externalities," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 55-83, March.
- Shy, Oz, 1996. "Technology revolutions in the presence of network externalities," International Journal of Industrial Organization, Elsevier, vol. 14(6), pages 785-800, October.
- Bental, Benjamin & Spiegel, Menahem, 1995. "Network Competition, Product Quality, and Market Coverage in the Presence of Network Externalities," Journal of Industrial Economics, Wiley Blackwell, vol. 43(2), pages 197-208, June. Full references (including those not matched with items on IDEAS)
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