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Dynamic Mixed Duopoly

Dynamic Mixed Duopoly PDF Author: Ramon Casadesus-Masanell
Publisher: Fundacion BBVA
ISBN:
Category :
Languages : en
Pages : 41

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Book Description
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.