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|Title: ||One-Way Networks, Two-Way Networks, Compatibility, and Antitrust|
|Authors: ||Economides, Nicholas|
White, Lawrence J.
|Issue Date: ||Dec-1994 |
|Series/Report no.: ||EC-93-14|
|Abstract: ||This paper develops some important concepts with respect to networks and
compatibility. We note that the familiar concept of complementarity lies
at the heart of the concept of compatibility. We further note the
distinction between two-way networks (e.g., telephones, railroads, the
Internet) and one-way networks (e.g., ATMs, television, distribution and
service networks). In the former, additional customers usually yield
direct externalities to other customers; in the latter the externalities
are indirect, through increases in the number of varieties (and lower
prices) of components. Most industries involve vertically related
components and thus are conceptually similar to one-way networks.
Accordingly, our analysis of networks has broad applicability to many
industrial frameworks. We proceed by exploring the implications of
networks and compatibility for antitrust and regulatory policy in three
areas: mergers, joint ventures, and vertical restraints.|
|Appears in Collections:||Economics Working Papers|
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