Networks, Complementary services competition 2 Rohlfs model is a monopoly model but has clear insights for oligopoly setting Market may fail Competition will be fierce--a firm that fails to reach a critical mass isnt just smaller than its rival--it dies Multiple equilibria are possible--Betamax versus vhs or Blu-Ray versus AOD DVD format--either system may win Winning system is not necessarily the best one9 Networks, Complementary Services & Competition 2 • Rohlfs model is a monopoly model but has clear insights for oligopoly setting – Market may fail – Competition will be fierce—a firm that fails to reach a critical mass isn’t just smaller than its rival—it dies – Multiple Equilibria are possible—Betamax versus VHS or Blu-Ray versus AOD DVD format—either system may win – Winning system is not necessarily the best one