Technological tying and the intensity of price competition: An empirical analysis of the video game industry

  title={Technological tying and the intensity of price competition: An empirical analysis of the video game industry},
  author={Timothy P. Derdenger},
  journal={Quantitative Marketing and Economics},
  • Timothy P. Derdenger
  • Published 24 April 2014
  • Economics, Computer Science
  • Quantitative Marketing and Economics
Using data from the 128-bit video game industry I evaluate the impact technologically tying has on the intensity of console price competition and the incentives for hardware firms to tie their produced software to their hardware. Tying occurs when a console hardware manufacturer produces software that is incompatible with rival hardware. There are two important trade-offs an integrated firm faces when implementing a technological tie. The first is an effect that increases console market power… 

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