A Duopoly Logit Model with Price Competition and Strategic Compatibility

Nicolas Jonard and Eric Schenk

Annals of Economics and Statistics, 2003, issue 69, 143-168

Abstract: This paper provides an analysis of compatibility in a sequential game in which firms first choose whether they supply compatible products and then set the price which they charge. The equilibrium compatibility configuration is the outcome of a trade-off between consumers' valuation of compatibility, and the loss in terms of product differentiation stemming from adhesion to a common standard. Compatibility is achieved provided the compatibility premium is not offset by the intensity of price competition Further, there tends to be under-provision of standardization.

Date: 2003
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.jstor.org/stable/20076367 (text/html)

Related works:
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: https://EconPapers.repec.org/RePEc:adr:anecst:y:2003:i:69:p:143-168

Access Statistics for this article

Annals of Economics and Statistics is currently edited by Laurent Linnemer

More articles in Annals of Economics and Statistics from GENES Contact information at EDIRC.
Bibliographic data for series maintained by Secretariat General () and Laurent Linnemer ().