An Theoretical and Empirical Research on the Transaction Structure and Competition among Complementary Products: An Application to the Video Game Industry
| Project/Area Number |
18530193
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Applied economics
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| Research Institution | Nanzan University |
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Principal Investigator |
MINAMIKAWA Kazumitsu Nanzan University, Faculty of Business Administration, Associate Professor (10295834)
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| Co-Investigator(Kenkyū-buntansha) |
MARUYAMA Masayoshi KOBE University, Graduate School of Business Administration, Professor (60135928)
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| Project Period (FY) |
2006 – 2007
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| Project Status |
Completed (Fiscal Year 2007)
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| Budget Amount *help |
¥2,630,000 (Direct Cost: ¥2,300,000、Indirect Cost: ¥330,000)
Fiscal Year 2007: ¥1,430,000 (Direct Cost: ¥1,100,000、Indirect Cost: ¥330,000)
Fiscal Year 2006: ¥1,200,000 (Direct Cost: ¥1,200,000)
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| Keywords | complementary goods / transaction structure / video game industry |
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| Research Abstract |
(1) The purpose of this project was to investigate the transaction structure and competition among Complementary goods in network industry theoretically and empirically. We have studied firms' incentives for vertical integration and bundled discounts of complementary products. We found that vertical integration and mixed bundling is a dominant strategy for all firms. Whereas, except for the systems of components that are very strongly differentiated, total surplus is maximized under independent ownership with bundled discounts. Thus, our model suggests that vertical separation is beneficial for both firms and consumers in such a situation of competitive bundling. We found that our result had important policy implications for broadband markets.
(2) We have examined the effects on pricing and quality choice of the merger of firms producing complementary components in a general model. We established the results that a complementary merger provides products of higher quality with lower prices, and achieves higher market coverage, higher consumer surplus and higher profits than independent ownership. Furthermore, it could be shown that the same results applied to the case of vertical integration of successive monopoly.
(3) In order to explore the network structure of software development in the Japanese home video game industry, we have conducted empirical studies to examine the factors determining the developers' choice of video game platform by using the mixed logit model and derived several significant results. Our results can be summarized as follows. First, the coefficient of platform embeddedness is negative and significant. This means that the more a platform was tightly embedded with a few developers, the less the developers were likely to launch products for it. Second, the positive and significant coefficient of platform dominance implies that the developers were more likely to release a title for a platform which had a dominant position.
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Report
(3 results)
Research Products
(15 results)
