망외부성이 존재하고 수직적으로 차별화된 제품 간의 호환성 전략 분석
Analysis of Compatibility Strategy between Vertically Differentiated Products under Network Externality
0
조회
0
다운로드
0
인용
0
참고문헌
키워드
초록
It is a general phenomenon for manufacturers to provide vertically differentiated product line for more profit through improved market coverage. For such manufacturers, the compatibility between vertically differentiated products is an important decision issue. Some manufacturers provide full compatibility between high and low version products, whereas some provide only downward compatibility for the purpose of recommending high version product. In this study, the two representative compatibility strategies, full or downward, between vertically differentiated products produced by a single manufacturer are analyzed, especially under network externality and in the viewpoint of profit maximization. To do this we used a market model which captures the basic essence of vertical differentiation and network externality. Based on the proposed market model, the profit maximizing solutions are derived and numerically analyzed. The results can be summarized as follows : (1) Regardless of compatibility strategy, under network externality, vertical differentiation is always advantageous in terms of profit. (2) The full compatibility strategy is shown to be the most advantageous in terms of profit. In addition, it is necessary to make quality difference between differentiated products as wide as possible to maximize profit. (3) To gradually drive low version product out of the market and shift the weight pendulum of market to high version product, it is shown that the downward compatibility strategy is essential. Unlike intuition, however, it is also shown that in order to drive low version product out of market, it is necessary to raise the quality of the low version product rather than to lower it.
Abstract
It is a general phenomenon for manufacturers to provide vertically differentiated product line for more profit through improved market coverage. For such manufacturers, the compatibility between vertically differentiated products is an important decision issue. Some manufacturers provide full compatibility between high and low version products, whereas some provide only downward compatibility for the purpose of recommending high version product. In this study, the two representative compatibility strategies, full or downward, between vertically differentiated products produced by a single manufacturer are analyzed, especially under network externality and in the viewpoint of profit maximization. To do this we used a market model which captures the basic essence of vertical differentiation and network externality. Based on the proposed market model, the profit maximizing solutions are derived and numerically analyzed. The results can be summarized as follows : (1) Regardless of compatibility strategy, under network externality, vertical differentiation is always advantageous in terms of profit. (2) The full compatibility strategy is shown to be the most advantageous in terms of profit. In addition, it is necessary to make quality difference between differentiated products as wide as possible to maximize profit. (3) To gradually drive low version product out of the market and shift the weight pendulum of market to high version product, it is shown that the downward compatibility strategy is essential. Unlike intuition, however, it is also shown that in order to drive low version product out of market, it is necessary to raise the quality of the low version product rather than to lower it.
참고문헌 (14)
- Baake, P., "Vertical product differentiation, network externalities, and compatibility decisions", International Journal of Industrial Organization, 19, pp.267~284 (2001)
- Chen, J., "Avoiding Market Dominance : Product Compatibility in Markets with Network Effects", The RAND Journal of Economics, 40(3), pp.455~483 (2009)
- 조형래, "망외부성이 존재하는 상품에 대한 독점 기업의 수직차별화 전략 분석", 한국산업경영시스템학회지, 41(2), pp.159~166 (2018), 한국산업경영시스템학회[DOI]
- 조형래, "수직적으로 차별화된 시장 하에서 망외부성이 미치는 영향에 대한 동태적 분석", 한국산업경영시스템학회지, 42(2), pp.1~8 (2019), 한국산업경영시스템학회[DOI]
- 조형래, "게임이론을 이용한 자체브랜드 제품의 가격 및 품질전략 분석", 한국산업경영시스템학회지, 34(3), pp.41~48 (2011), 한국산업경영시스템학회
- Choi, J. P., "Network Externality, Compatibility Choice, and Planned Obsolescence", The Journal of Industrial Economics,, 42(2), pp.167~182 (1994)
- Chou, C. H., "Partial Compatibility and Vertical Differentiation", Economics Bulletin, 12(21), pp.1~8 (2007)
- Conner, K. R., "Obtaining Strategic Advantage from Being Imitated : When Can Encouraging “Clones” Pay?", Management Science, 41(2), pp.209~225 (1995)
- Farrel, J., "Converters, Compatibility, and the Control of Interfaces", The Journal of Industrial Economics, XL(1), pp.9~35 (1992)
- Griva, K., "Price Competition in a Differentiated Products Duopoly under Network Effects", Information Economics and Policy, 23(1), pp.85~97 (2011)
- Jonard, N., "A Note on Compatibility and Entry in a Circular Model of Product Differentiation", Economics Bulletin, 12(1), pp.1~9 (2004)
- Katz, M. L., "Network Externalities, Competition, and Compatibility", The American Economic Review, 75(3), pp.424~440 (1985)
- Kim, J., "Product Compatibility as a Signal of Quality in a Market with Network Externalities", International Journal of Industrial Organization, 20(7), pp.942~964 (2002)
- Shapiro, C., "Information Rules" (1999), Harvard Business School Press