NDLI: Does a Platform Monopolist Want Competition?

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Does a Platform Monopolist Want Competition?

Content Provider	Scilit
Author	Niedermayer, Andras
Copyright Year	2015
Abstract	We consider a software vendor first selling a monopoly platform and then an application running on this platform. He may face competition by an entrant in the applications market. The platform monopolist can benefit from competition for three reasons. First, his profits from the platform increase. Second, competition serves as a credible commitment to lower prices for applications. Third, higher expected product variety may lead to higher demand for his application. Results carry over to non-software platforms and, partially, to upstream and downstream firms. The model also explains why Microsoft Office is priced significantly higher than Microsoft’s operating system.
Related Links	https://epub.ub.uni-muenchen.de/25322/1/523SFB.pdf
ISSN	21945993
e-ISSN	14469022
DOI	10.1515/rne-2015-0006
Journal	Review of Network Economics
Issue Number	1
Volume Number	14
Language	English
Publisher	Walter de Gruyter GmbH
Publisher Date	2015-01-01
Access Restriction	Open
Subject Keyword	Review of Network Economics Finance Economics Complementary Goods Entry Microsoft Platforms Price Commitment Product Variety Two-sided Markets Vertical Integration Journal: Review of Network Economics, Issue- 3
Content Type	Text
Resource Type	Article
Subject	Economics and Econometrics

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