Enforced compatibility and control of switching costs in markets with network externalities: an experiment

• Authors: Tomasz Kopczewski , Michał Krawczyk , Przemysław Kusztelak
• Languages of publication: EN

Abstracts

EN

We experimentally investigate two competition policy measures relevant for markets with network externalities: mandating technological compatibility and lowering the cost of switching between providers. We do so in a virtual market with the roles of both sellers and buyers being played by student subjects. We find only limited support for usefulness of the analyzed measures: our treatment manipulations have no effect on sellers’ pricing strategies. They do, however, reduce individual lock-in, helping the buyers to obtain the currently cheaper variant and thus increase customers’ welfare.

Keywords

EN

network externalities; lock-in; technology standards

• Publisher: Wydział Nauk Ekonomicznych Uniwersytetu Warszawskiego
• Journal: Ekonomia. Rynek, Gospodarka, Społeczeństwo
• Year: 2013
• Issue: 35
• Pages: 45-64

Contributors

author

Tomasz Kopczewski

• Faculty of Economic Sciences, University of Warsaw

author

Michał Krawczyk

• Faculty of Economic Sciences, University of Warsaw

author

Przemysław Kusztelak

• Faculty of Economic Sciences, University of Warsaw