Household Demand, Network Externality Effects and Intertemporal Price Discrimination
AbstractThis paper examines the optimality of intertemporal price discrimination when network externality effects are present in the consumption of a durable good. We conduct our study in two settings. In a model with two household types, utilities are dependent on the cumulative proportion of households that have purchased the durable good. Next, in a model with a continuum of household types, we extend the analysis to the case where households consume both a durable good and a stream of non-durable goods. We show that in both settings, the presence of network externalities facilitates a sales strategy with intertemporal price discrimination. Copyright Springer-Verlag Wien 2005
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal Journal of Economics - Zeitschrift für Nationalökonomie.
Volume (Year): 84 (2005)
Issue (Month): 1 (02)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=108909
intertemporal price discrimination; durable good; household demand; network externality; D40;
Other versions of this item:
- Winston T.H. Koh, 2005. "Household Demand, Network Externality Effects and Intertemporal Price Discrimination," Working Papers 05-2005, Singapore Management University, School of Economics.
- Winston T.H. Koh, 2005. "Household Demand, Network Externality Effects and Intertemporal Price Discrimination," Microeconomics Working Papers 22455, East Asian Bureau of Economic Research.
- D40 - Microeconomics - - Market Structure and Pricing - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cabral, Luis M. B. & Salant, David J. & Woroch, Glenn A., 1999.
"Monopoly pricing with network externalities,"
International Journal of Industrial Organization,
Elsevier, vol. 17(2), pages 199-214, February.
- Van Cayseele, Patrick, 1991. "Consumer rationing and the posssibility of intertemporal price discrimination," European Economic Review, Elsevier, vol. 35(7), pages 1473-1484, October.
- Conlisk, John & Gerstner, Eitan & Sobel, Joel, 1984. "Cyclic Pricing by a Durable Goods Monopolist," The Quarterly Journal of Economics, MIT Press, vol. 99(3), pages 489-505, August.
- Sobel, Joel, 1984. "The Timing of Sales," Review of Economic Studies, Wiley Blackwell, vol. 51(3), pages 353-68, July.
- Stokey, Nancy L, 1979. "Intertemporal Price Discrimination," The Quarterly Journal of Economics, MIT Press, vol. 93(3), pages 355-71, August.
- Ault, Richard W, et al, 2000. "Rebates, Inventories, and Intertemporal Price Discrimination," Economic Inquiry, Western Economic Association International, vol. 38(4), pages 570-78, October.
- Coase, Ronald H, 1972. "Durability and Monopoly," Journal of Law and Economics, University of Chicago Press, vol. 15(1), pages 143-49, April.
- Mason, Robin, 2000. "Network externalities and the Coase conjecture," European Economic Review, Elsevier, vol. 44(10), pages 1981-1992, December.
- Locay, Luis & Rodriguez, Alvaro, 1992. "Price Discrimination in Competitive Markets," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 954-65, October.
- Karp, Larry, 1995.
"Depreciation Erodes the Coase Conjecture,"
Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series
qt1fs6j5nn, Department of Agricultural & Resource Economics, UC Berkeley.
- Karp, L., 1992. "Depreciation erodes the coase conjecture," Discussion Paper Series In Economics And Econometrics 9210, Economics Division, School of Social Sciences, University of Southampton.
- Clerides, Sofronis K., 2002. "Book value: intertemporal pricing and quality discrimination in the US market for books," International Journal of Industrial Organization, Elsevier, vol. 20(10), pages 1385-1408, December.
- Bensaid, Bernard & Lesne, Jean-Philippe, 1996. "Dynamic monopoly pricing with network externalities," International Journal of Industrial Organization, Elsevier, vol. 14(6), pages 837-855, October.
- Varian, Hal R., 1989. "Price discrimination," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 10, pages 597-654 Elsevier.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.