Competition in wearable device market: the effect of network externality and product compatibility

摘要: The rapid growth in consumer adoption of wearable devices has garnered the attention both practitioners and academia. Competition device market is substantial complicated. In this study, we investigate impact network externality on competition a two-dimensional product differentiation model. We consider that broad array products (horizontal differentiation) various quality levels (vertical differentiation). study two types externalities according to compatibility structures. Our model indicates firm profits are decreased by horizontal dominance. Network also increases (decreases) higher-quality (lower-quality) firm's profit vertical Moreover, firms should ensure their incompatible with those rivals when large, they release compatible small Firms always competitors