MIT Libraries logoDSpace@MIT

MIT
View Item 
  • DSpace@MIT Home
  • MIT Open Access Articles
  • MIT Open Access Articles
  • View Item
  • DSpace@MIT Home
  • MIT Open Access Articles
  • MIT Open Access Articles
  • View Item
JavaScript is disabled for your browser. Some features of this site may not work without it.

Leveraging Monopoly Power by Degrading Interoperability: Theory and Evidence from Computer Markets

Author(s)
Genakos, Christos; Kühn, Kai-Uwe; Van Reenen, John Michael
Thumbnail
DownloadAccepted version (456.7Kb)
Terms of use
Creative Commons Attribution-Noncommercial-Share Alike http://creativecommons.org/licenses/by-nc-sa/4.0/
Metadata
Show full item record
Abstract
When will a monopolist have incentives to leverage her/his market power in a primary market to foreclose competition in a complementary market by degrading compatibility/interoperability of her/his products with those of her/his rivals? We develop a framework where leveraging extracts more rents from the monopoly market by ‘restoring’ second‐degree price discrimination. In a random coefficient model with complements, we derive a policy test for when incentives to reduce rival quality will hold. Our application is to Microsoft's alleged strategic incentives to leverage market power from personal computer to server operating systems. We estimate a structural random coefficients demand system that allows for complements (personal computers and servers). Our estimates suggest that there were incentives to reduce interoperability that were particularly strong at the turn of the 21st century.
Date issued
2017-11
URI
https://hdl.handle.net/1721.1/122358
Department
Sloan School of Management
Journal
Economica
Publisher
Wiley
Citation
Genakos, Christos et al. "Leveraging Monopoly Power by Degrading Interoperability: Theory and Evidence from Computer Markets." Economica 85, 340 (October 2018): 873-902 © 2017 The London School of Economics and Political Science
Version: Author's final manuscript
ISSN
0013-0427

Collections
  • MIT Open Access Articles

Browse

All of DSpaceCommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsThis CollectionBy Issue DateAuthorsTitlesSubjects

My Account

Login

Statistics

OA StatisticsStatistics by CountryStatistics by Department
MIT Libraries
PrivacyPermissionsAccessibilityContact us
MIT
Content created by the MIT Libraries, CC BY-NC unless otherwise noted. Notify us about copyright concerns.