Systems competition, vertical merger, and foreclosure

被引:49
作者
Church, J [1 ]
Gandal, N
机构
[1] Univ Calgary, Calgary, AB, Canada
[2] Tel Aviv Univ, IL-69978 Tel Aviv, Israel
关键词
D O I
10.1162/105864000567783
中图分类号
F [经济];
学科分类号
02 ;
摘要
We address the possibility of foreclosure in markets where the final good consists of a system composed of a hardware good and complementary software and the value of the system depends on the availability of software. Foreclosure occurs when a hardware firm merges with a software firm and the integrated firm makes its software incompatible with a rival technology or system. We find that foreclosure can be an equilibrium outcome where both the merger and compatibility decisions are part of a multistage game which permits the foreclosed hardware firm to play a number of counterstrategies. Further, foreclosure can be an effective strategy to monopolize the hardware market.
引用
收藏
页码:25 / 51
页数:27
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