Property rights in emerging platform technologies

This article considers an externality that affects a broad range of markets , specifically markets when one set of firms sells some platform technology such as a computer, video game console, or operating system, while another possibly overlapping set of firms sells peripherals compatible with that p latform, for example, computer software or video game cartridges. The exter nality causes certain peripheral sellers to charge prices that are unprofit ably high. That is, these firms could earn greater profits if only they cou ld coordinate to charge lower prices. In many markets, such coordination is possible; firms can contract, for example, or integrate. In markets based on relatively new platform technologies, however, coordination will typical ly be difficult. The article explains why and argues that intellectual prop erty law can and should facilitate price coordination in these "emerging te chnology'' settings.