Abstract We study how quality uncertainty among consumers affects price competition in the presence of network effects. Our main result is that quality uncertainty has non-monotonic effects on firms’ price setting behavior. Prices and industry profit is first falling, then increasing, in quality uncertainty. In addition we show that quality uncertainty can force a high quality provider to be aggressive to the point where its price in the first period is below that of a low quality provider. We also analyse the incentives for compatibility under quality uncertainty, and find that when quality uncertainty is sufficiently high, compatibility may be used as a means of softening price competition.

中文翻译：

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具有质量不确定性和网络效应的市场竞争

摘要我们研究了在存在网络效应的情况下，消费者之间的质量不确定性如何影响价格竞争。我们的主要结果是质量不确定性对企业的价格设定行为具有非单调的影响。由于质量不确定性，价格和行业利润首先下降，然后上升。此外，我们表明，质量不确定性可能会迫使高质量的提供者在第一阶段的价格低于劣质提供者的价格时具有攻击性。我们还分析了质量不确定性下兼容性的诱因，并发现当质量不确定性足够高时，兼容性可以用作软化价格竞争的一种手段。