QWERTY is efficient

Guimarães, Bernardo; Pereira, Ana Elisa Gonçalves

doi:10.1016/j.jet.2016.03.008

Cited by 9 publications

(8 citation statements)

References 13 publications

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“…We now consider a particular case of the model where the agents' utility is a linear function of θ t and n t , as in Guimaraes and Pereira (2016). This case is particularly tractable as it allows for closed form solutions in the limiting cases previously discussed.…”

Section: Linear Utilitymentioning

confidence: 99%

Dynamic coordination with timing frictions: Theory and applications

Guimarães¹,

Machado

Pereira

2020

J Public Economic Theory

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We present a general framework of dynamic coordination with timing frictions. A continuum of agents receive random chances to choose between two actions and remain locked in the selected action until their next opportunity to reoptimize. The instantaneous utility from each action depends on an exogenous fundamental that moves stochastically and on the mass of agents currently playing each action. Agents' decisions are strategic complements and history matters. We review some key theoretical results and show a general method to solve the social planner's problem. We then review applications of this framework to different economic problems: network externalities, statistical discrimination, and business cycles. The positive implications of these models are very similar, but the social planner's solution points to very different results for efficiency in each case. Last, we review extensions of the framework that allow for endogenous hazard rates and ex ante heterogeneous agents.

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Section: Linear Utilitymentioning

confidence: 99%

Dynamic coordination with timing frictions: Theory and applications

Guimarães¹,

Machado

Pereira

2020

J Public Economic Theory

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“…Such is the case of the QWERTY keyboard, which is intrinsically worse than the Dvorak alternative, but potentially preferred by the social planner. A similar argument can be made for Windows over Linux, see Guimaraes and Pereira (2016) for more details.…”

Section: Gama and Samanomentioning

confidence: 62%

Free and second‐best entry in oligopolies with network effects

Gama

Samano

2021

J Public Economic Theory

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We compare the number of firms in equilibrium in a Cournot industry with positive network effects and complete compatibility, under free and second-best entry. Under free entry, the firms decide whether to enter the market or not; in the second-best problem, the number of firms is established by the regulator to maximize social welfare (the regulator controls entry but not production). We show that when individual equilibrium output decreases with entry (businessstealing competition), free entry may lead to more or less firms than the second-best problem. This contrasts with the standard (nonnetwork) Cournot oligopoly model, wherein with business-stealing competition, free entry leads to an excessive number of firms compared with the second-best solution.

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“…This is the cause of incumbency advantage in our model. 6 Our model shares some features with Farrell and Saloner (1986), Frankel and Pauzner (2000), and Guimaraes and Pereira (2016) where users have multiple opportunities to migrate. In section 2, we discuss our relationship to those articles.…”

Section: Introductionmentioning

confidence: 89%

Should I stay or should I go? Migrating away from an incumbent platform

Biglaiser¹,

Crémer

Veiga

2022

The RAND J of Economics

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We study incumbency advantage in markets with positive consumption externalities. Users of an incumbent platform receive stochastic opportunities to migrate to an entrant and can either accept them or wait for a future opportunity. In some circumstances, users have incentives to delay migration until others have migrated. If they all do so, no migration takes place, even when migration would have been Pareto-superior. We use our framework to identify environments where incumbency advantage is larger. A key result is that having more migration opportunities actually increases incumbency advantage.

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QWERTY is efficient

Cited by 9 publications

References 13 publications

Dynamic coordination with timing frictions: Theory and applications

Dynamic coordination with timing frictions: Theory and applications

Free and second‐best entry in oligopolies with network effects

Should I stay or should I go? Migrating away from an incumbent platform

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