Monopoly Pricing With Network Externalities

Cabral, Luís M. B.; Slant, David; Woroch, Glenn

http://hdl.handle.net/10362/85963

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Autores

Cabral, Luís M. B.

Slant, David

Woroch, Glenn

Resumo(s)

How should a monopolist price a new durable good or technology which is subject to network externalities? In particular, should the monopolist set a low introductory price to attract a "critical mass" of adopters? In this paper, by means of a series of stylized models, we provide intuition as to when and why introductory pricing might occur in the presence of network externalities. Incomplete information about demand, asymmetric information about costs or difficulties in coordination are necessary in order for introductory pricing to occur at a subgame perfect equilibrium.

URI

http://hdl.handle.net/10362/85963

Citação

Cabral, Luis, Slant, David and Woroch, Glenn, Monopoly Pricing With Network Externalities (1992). FEUNL Working Paper Series No. 196

Editora

Nova SBE

Coleções

NSBE - Working Paper Series

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