Compatibility, Interoperability, and Market Power in Upgrade Markets

James J. Anton () and Gary Biglaiser

No 10-31, Working Papers from Duke University, Department of Economics

Abstract: We examine the market power of a seller who repeatedly offers upgraded versions of a product. In the case of pure monopoly, the seller also controls compatibility across versions. In the case of an entrant who offers an upgrade, the incumbent seller also controls subsequent interoperability across versions. We argue that control of compatibility and interoperability does not allow an incumbent seller to charge a price premium relative to when such control is absent and, consequently, neither is a necessary source of market power.

Keywords: Upgrade markets; Compatibility; Standards; Interoperability; Innovation (search for similar items in EconPapers)
JEL-codes: D42 L15 O32 (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID15 ... ctid=1589706&mirid=1 main text

Related works:
Journal Article: Compatibility, interoperability, and market power in upgrade markets (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:duk:dukeec:10-31

Access Statistics for this paper

More papers in Working Papers from Duke University, Department of Economics
Address: Department of Economics Duke University 213 Social Sciences Building Box 90097 Durham, NC 27708-0097
Series data maintained by Department of Economics Webmaster ().