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dc.contributor.authorDogan, Pinar
dc.date.accessioned2011-04-19T17:36:12Z
dash.embargo.terms2011-06-01
dc.date.issued2009
dc.identifier.citationDogan, Pinar. 2009. Vertical Networks, Integration, and Connectivity. Journal of Economics and Management Strategy 18(2): 347-392.en_US
dc.identifier.issn1058-6407en_US
dc.identifier.urihttp://nrs.harvard.edu/urn-3:HUL.InstRepos:4863169
dc.description.abstractThis paper studies competition in a network industry with a stylized two layered network structure, and examines: (i) price and connectivity incentives of the upstream networks, and (ii) incentives for vertical integration between an upstream network provider and a downstream firm. The main result of this paper is that vertical integration occurs only if the initial installed-base difference between the upstream networks is sufficiently small, and in that case, industry is configured with two vertically integrated networks, which yields highest incentives to invest in quality of interconnection. When the installed-base difference is sufficiently large, there is no integration in the industry, and neither of the firms have an incentive to invest in quality of interconnection. An industry configuration in which only the large network integrates and excludes (or raises cost of) its downstream rival does not appear as an equilibrium outcome: in the presence of a large asymmetry between the networks, when quality of interconnection is a strategic variable, the large network can exercise a substantial market power without vertical integration. Therefore, a vertically separated industry structure does not necessarily yield procompetitive outcomes.en_US
dc.language.isoen_USen_US
dc.publisherWiley-Blackwellen_US
dc.relation.isversionofhttp://onlinelibrary.wiley.com/doi/10.1111/j.1530-9134.2009.00217.x/abstracten_US
dash.licenseLAA
dc.subjectMBG - Markets, Business, and Governmenten_US
dc.subjectVertical Integrationen_US
dc.subjectInterconnectionen_US
dc.subjectNetwork Externalitiesen_US
dc.titleVertical Networks, Integration, and Connectivityen_US
dc.typeJournal Articleen_US
dc.description.versionAccepted Manuscripten_US
dc.relation.journalJournal of Economics & Management Strategyen_US
dash.depositing.authorDogan, Pinar
dc.date.available2011-06-01T07:34:36Z
dc.identifier.doi10.1111/j.1530-9134.2009.00217.x/abstract*
dash.contributor.affiliatedDogan, Pinar


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