This paper investigates the competition between vertically differentiated platforms in two-sided markets. We assume the presence of two competing platforms producing either higher- or lower-quality devices for consumers. Each platform decides the price of its hardware device for consumers and...

This paper investigates how switching costs affect product compatibility and market dynamics in network industries. A reduction in the switching cost makes the firms' products more attractive relative to the outside good, which diminishes the market expansion benefit of making products...