| Summary: | 碩士 === 國立中山大學 === 經濟學研究所 === 106 === This paper builds a duopoly model with network externality and vertical product differentiation to examine the effects of network externality on the product quality, network size and the profits of high- and low-quality firms under different types of competition. The results indicate that, under price competition, when network externality increases, the low-quality firm lowers its product quality while the high-quality firm first decreases and then increases its product quality. By contrast, under quantity competition, the low-quality firm lowers its product quality while the high-quality firm increases its product quality.
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