In industries where consumers can assemble their own systems, firms must decide whether to make their components compatible with those of their rivals. We examine a two-stage game in which two fully integrated firms make their compatibility decisions before competing in prices. The symmetric...

Innovators who have made significant breakthroughs may be tempted to get a head start in developing the applications of a new discovery before commercializing any new product. We consider how this socially undesirable waiting period and the pattern of development of subsequent innovations are...

In this article, we analyze the pricing strategies of firms that compete for the demand of an assortment of goods in a complete information static framework. In particular, we model the competition between two symmetric firms in a market that consists of two types of consumers, each of which may...

Consider a duopoly market in which consumers have heterogeneous information about the quality differential q of the two goods. When firms are ignorant about q, consumers rationally believe that a firm with high market shares is likely to produce a high-quality good. As a result, firms try to...