Self-Reinforcing Mechanisms and Market Information

Elettra Agliardi and M. S. Bebbington

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: We consider the possibility of switching between two technological standards when there are network externalities and imprecise market information. Multiple equilibria in terms of market shares can arise. The main result is that lock-in to one of multiple equilibria is not a permanent out- come when the source of lock-in is network externalities. The market lingers at prevalence of one standard with intermittent transitions to prevalence of the other. In other words, lock-in is a temporary occurrence.

Date: 1992-07
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Related works:
Journal Article: Self-reinforcing mechanisms and market information (1997)
Working Paper: Self-Reinforcing Mechanisms and Market Information (1992)
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:137

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