Credibility, pre-production and inviting competition in a network market

Abstract

Previous authors have suggested inviting competition as a solution to the credibility issues that arise when a new network good is introduced. We suggest an alternative remedy of pre-producing the good. The two strategies are compared, as are combinations of these two strategies in two different manners. The comparison yields a deeper understanding about how and why each strategy works. © 2010 Berkeley Electronic Press. All rights reserved.