Journal article
Location Decisions of Competing Networks
Journal of economics & management strategy, v 21(4), pp 989-1005
01 Dec 2012
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
Early entrants in markets with network effects usually occupy a central location and serve agents with intermediate tastes, whereas later entrants are niche players. Why would the first entrant choose to become a general network, given that later entrants will not have enough room for differentiation, resulting in a more intense competition for market share? In a Hotelling model with two rival networks, we show that for intermediate values of the network externality parameter the location equilibrium is indeed asymmetric: the first entrant locates at the center whereas the second entrant chooses an extreme (niche) location.
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Details
- Title
- Location Decisions of Competing Networks
- Creators
- Konstantinos Serfes - Drexel UniversityEleftherios Zacharias - Athens University of Economics and Business
- Publication Details
- Journal of economics & management strategy, v 21(4), pp 989-1005
- Publisher
- Wiley
- Number of pages
- 17
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000309927400005
- Scopus ID
- 2-s2.0-84867588868
- Other Identifier
- 991019168601004721
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Economics
- Management