Quality Improvement and Network Externalities

descriptionPublicationkeyboard_double_arrow_right Article , Other literature type , Research , Preprint 01 Jan 2006 Belgium English Publisher:Elsevier BVJournal:SSRN Electronic Journal (eissn: 1556-5068,

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Authors: GABSZEWICZ, Jean J.; GARCIA, Filomena;

doi: 10.2139/ssrn.886294

handle: 2078.1/4692

Quality Improvement and Network Externalities

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Abstract

We analyse the optimal pricing choice of an incumbent firm that sells a good with network externalities and is threatened by the entry of a higher quality variant. In the framework of a vertical differentiation model, we find a necessary and sufficient condition under which quality improvement occurs as a result of this competition.

Country

Belgium

Related Organizations

DePaul University
United States
Technical University of Lisbon
Portugal
Université Catholique de Louvain
Belgium
University of Lisbon
Portugal
Indiana University
United States

Keywords

vertical product differentiation, network externalities, quality improvement, Quality improvement, Vertical product differentiation, Network externalities, jel: jel:L11, jel: jel:L12, jel: jel:L15

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