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FUNCTIONAL DEGRADATION AND ASYMMETRIC NETWORK EFFECTS -super-*

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Author Info
GERGELY CSORBA
JONG-HEE HAHN

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Abstract

In markets subject to network effects, firms often remove some functions of their original products and sell a functionally-downgraded version at a lower or zero price. This paper aims to provide a pure network effect based explanation of such a practice. Building a functional degradation model with asymmetric network effects, we investigate when and why firms have incentives to introduce a functionally-degraded good and discuss its welfare implication. Copyright Blackwell Publishing Ltd. 2006.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-6451.2006.00282.x
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Publisher Info
Article provided by Blackwell Publishing in its journal The Journal of Industrial Economics.

Volume (Year): 54 (2006)
Issue (Month): 2 (06)
Pages: 253-268
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Handle: RePEc:bla:jindec:v:54:y:2006:i:2:p:253-268

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821

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This page was last updated on 2009-10-26.

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