PRODUCT COMPATIBILITY CHOICE IN A MARKET WITH TECHNOLOGICAL PROGRESS

摘要: In markets where advantages, e.g., network ex ternalities, are significant, firms' product compatibility choices an import ant determinant of industry performance. This paper compares the private and soc ial incentives to achieve in a two-period duopoly model with (poss ible stochastic) technological progress. Earlier analysis using static models fo und that social industrywide always exce ed incentives. Here authors find firms may have ially excessive because serves as means relaxing price competition during early stages growth. Copyright 1986 by Royal Economic Society.