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Network externalities, competition, and compatibility

Michael L. Katz
- 01 Jan 1985 - 
- Vol. 75, Iss: 3, pp 424-440
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This article is published in The American Economic Review.The article was published on 1985-01-01 and is currently open access. It has received 6100 citations till now. The article focuses on the topics: Network economics.

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Mobility Barriers and the Value of Incumbency

TL;DR: In this paper, the authors discuss the difference between determinants of barriers to the mobility of capital and the welfare implications of entry and exit and discuss the role of behavior in the determination of the conditions of entry.
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Types of firms generating network externalities and MNCs' co-location decisions

TL;DR: In this paper, the authors identify and examine sources of network externalities that influence MNCs to agglomerate their foreign operations in specific regions using data for Korean firms that invested in China.
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Is product life cycle theory a special case? Dominant designs and the emergence of market niches through coevolutionary-learning

TL;DR: In this paper, a second-order learning model is proposed to model technological innovation as a coupled, secondorder learning system comprising a population of consumers and a populations of firms, and it is shown that, while the system tends to converge towards a limited number of design configurations, there is no reason to expect it to stabilize around a single design.
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Leveraging the Customer Base: Creating Competitive Advantage Through Knowledge Management

TL;DR: In this paper, the authors analyze the competitive dynamics and market structure that emerge as a result of firms competing with knowledge management (KM) systems and suggest that in a competitive setting, when firms' ability to leverage their customer base is high, KM should lead to quality improvement rather than cost reductions.
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Auctions with Downstream Interaction among Buyers

TL;DR: In this paper, the authors study auctions for an invisible object and derive equilibrium bidding strategies for second price auctions in which the seller may impose reserve prices or entry fees, while pointing out the differences between the cases where impacts (which they call externalities) are positive or negative.
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Monopoly, quality, and regulation

TL;DR: In this paper, the authors argue that under regimes of monopoly and monopolistic competition, product characteristics (which are often endogenous variables) are not usually optimally set under the pressure of market forces, and that regulation is also beset with difficulties when price and quality are decision variables.
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Critical Mass and Tariff Structure in Electronic Communications Markets

TL;DR: In this article, the authors developed an economic model that determines both the required critical mass size for startup and the ultimate expansion level of such a system and evaluated the effects of different pricing structures for the service under the assumption that users maximize benefits minus cost and a monopoly supplier maximizes profit.
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Tax Analysis in an Oligopoly Model

TL;DR: In this article, the authors use the conjectural variations model of oligopoly to analyze the way in which the incidence of a tax depends upon the pattern of firm interaction and show that the errors that arise in excess burden calculations when incorrect assumptions on market structure are made.
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Tax Analysis in an Oligopoly Model

TL;DR: In this paper, the authors use the conjectural variations model of oligopoly to analyze the way in which the incidence of a tax depends on the pattern of firm interaction and show that the errors that can arise in excess burden calculations when incorrect assumptions on market structure are made.