Biglaiser, Gary and Cremer, Jacques <br/><br/>
Value of incumbency: when platforms face heterogeneous customers 

 - American Economic Journal: Microeconomics 
 - 12(4), Nov, 2020: p.229-269 
<br/><br/> We study competition for the market in a dynamic model with network externalities, focusing on the efficiency of market outcomes. We propose a representation of the strategic advantages of incumbency and embed it in a dynamic framework with heterogeneous consumers. Then, we completely identify the conditions under which inefficient equilibria with several platforms emerge at equilibrium; explore the reasons why these inefficient equilibria arise; and compute the value of incumbency and analyze why static models generally exaggerate it. – Reproduced  
<br/><br/><label>Subjects--Topical Terms: </label><br/>Market Structure, Pricing, Oligopoly