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Efficient upgrading in network goods : is commitment always good?
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Athanasopoulos, Thanos (2013) Efficient upgrading in network goods : is commitment always good? Working Paper. Coventry, UK: University of Warwick, Department of Economics. Warwick economics research papers series (TWERPS), Volume 2013 (Number 1006).
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Abstract
The frequency of upgrades in technology markets is not socially optimal when the quality improvement is negligible and smaller than the adoption cost of the new product. In monopolies, the literature has identifed a suff cient factor for efficient upgrading: the firms power
to commit to whether it will upgrade or not in the future. This is not true when an entry threat applies. In fact, it could even be that commitment is a factor of inefficiency when the market is open to competition. As shown in this paper, the incumbentís commitment adds
an additional source of inefficiency while an entry threat could dissolve social optimality.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | H Social Sciences > HB Economic Theory | ||||
Divisions: | Faculty of Social Sciences > Economics | ||||
Library of Congress Subject Headings (LCSH): | Economics -- Mathematical models, Monopolies , Competition , High technology | ||||
Series Name: | Warwick economics research papers series (TWERPS) | ||||
Publisher: | University of Warwick, Department of Economics | ||||
Place of Publication: | Coventry, UK | ||||
Official Date: | 30 March 2013 | ||||
Dates: |
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Volume: | Volume 2013 | ||||
Number: | Number 1006 | ||||
Number of Pages: | 23 | ||||
Status: | Not Peer Reviewed | ||||
Access rights to Published version: | Open Access (Creative Commons) | ||||
Date of first compliant deposit: | 1 August 2016 | ||||
Date of first compliant Open Access: | 1 August 2016 |
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