Dynamic Mixed Duopoly
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Dynamic Mixed Duopoly
Author | : Ramon Casadesus-Masanell |
Publisher | : Fundacion BBVA |
Total Pages | : 41 |
Release | : 2003 |
Genre | : |
ISBN | : |
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This paper analyzes a dynamic mixed duopoly in which a profit-maximizing competitor interacts with a competitor that prices at zero (or marginal cost), with the cumulation of output affecting their relative positions over time. The modeling effort is motivated by interactions between Linux, an open-source operating system, and Microsoft's Windows in the computer server segment, and consequently emphasizes demand-side learning effects that generate dynamic scale economies (or network externalities). Analytical characterizations of the equilibrium under such conditions are offered, and some comparative static and welfare effects are examined.
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