Recently, as informatization of transactions and digitization of product itself progress, the influence of network externalities is increasing. The reason why network externalities receive so much attention is that they fundamentally lead to fierce price competition between products. Following this trend, in this paper, we study the effect of quality and compatibility on the price competition between products under network externalities. To do this, we first present a new market model incorporating quality, network externalities and compatibility. Based on the presented model, the Nash and Stackelberg equilibrium solutions are derived and analyzed numerically. The results can be summarized as follows: First, when the quality difference between products is small, the Nash method of pricing is optimal, whereas when the quality difference is large to some extent, the Stackelberg method of pricing is optimal. Second, in the case of the low quality product, it was shown that there are situations where it is necessary to intentionally lower its own quality for more profit. Third, it was also shown that compatibility mitigates the effects of network externalities.

1. 서 론
2. 시장모형
3. Nash 균형해 분석
4. Stackelberg 균형해 분석
    4.1 품질 우위 업체가 price-leader인 경우
    4.2 품질 하위업체가 price-leader인 경우
5. 최적 가격결정 방식 분석
6. 결론 및 추후 연구 방향
References

• Hyung-Rae Cho(Department of Industrial Systems Engineering, ERI, Gyeongsang National University) | 조형래 (경상대학교 공과대학 산업시스템공학부, 공학연구원)
• Minho Rhee(Department of Industrial Systems Engineering, ERI, Gyeongsang National University) | 이민호 (경상대학교 공과대학 산업시스템공학부, 공학연구원) Corresponding author