Incentives to achieve mutual compatibility in a market with switching costs

被引:0
|
作者
Kim, JY [1 ]
机构
[1] Dongguk Univ, Seoul, South Korea
来源
B&ESI: BUSINESS & ECONOMICS FOR THE 21ST CENTURY, VOL I: ANTHOLOGY | 1997年
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中图分类号
F [经济];
学科分类号
02 ;
摘要
We consider the effect of firms' decision to make their products mutually compatible on the oligopoly outcome in a two period model with switching costs. It is asserted that if consumers' future tastes are uncertain, firms will have the incentive to form a coalition of mutual compatibility to attract more customers in the first period by reducing switching costs between the products of the members. As a result, the profits of the firms within the coalition become higher, but, contrary to our conjecture, their market shares become lower and no firm is driven out of the market by the exclusive coalition of mutual compatibility.
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页码:321 / 332
页数:12
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