Anti-Competitive Interconnection: The Effects of the Elasticity of Consumers’ Expectations and the Shape of the Network Effects Function

Revealing Incentives for Compatibility Provision in Vertically Differentiated Network Industries

“…For instance, a buyer of a Nissan sedan can enjoy the indirect network effects of the Renault service facilities. We borrow this example from Alexandrov (2015). compatibility is a feature of the product itself, a characteristic that enhances the network effects, like a converter incorporated in the product.…”

“…Under strong network effects, consumers expectations play a determinant role on the equilibrium outcomes. Alexandrov (2015) focuses on the effect of different expectations on the equilibria; also, under strong network effects, equilibria are generally not coalition-proof, in the sense that coordinated actions by players would lead to the market tipping. Ambrus and Argenziano (2009) use the concept of coalitional rationalizability proposed by Ambrus (2006) to select among the possible equilibria.…”

“…A number of articles discuss the alternative path toward compatibility, which, as mentioned before, is standardization. These include Saloner (1985, 1992), and more recently Ostrovsky and Schwarz (2005) and Alexandrov (2015).…”

Sufficient Decisions in Multi‐Sided and Multiproduct Markets

“…9 Similarly, all the theoretical issues present in standard one-decisional markets remain, for example tipping and multiple equilibria. See Alexandrov [2015] and Hagiu and Spulber [2013] who show how one can overcome tipping via product differentiation and content. Similarly, we do not derive new conditions guaranteeing the existence of Nash equilibria in pure strategies.…”