Game Analysis on Differential Products With Network Externalities

This study provides an analysis of the influence of compatibility and network externality on vertical differential market.Then,they compete in prices simultaneously.The main findings suggest that,the product quality of higher(lower)quality are different on these three conditions:with externality and without compatibility,with externality and with compatibility,with externality and with compatibility,so do the average level of product quality,prices,demands,profits and social welfare.And they all also change with the degree of externality and compatibility.