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
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Bibliographic InfoArticle provided by Springer in its journal Journal of Economics - Zeitschrift für Nationalökonomie.
Volume (Year): 84 (2005)
Issue (Month): 1 (02)
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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," Microeconomics Working Papers 22455, East Asian Bureau of Economic Research.
- Winston T.H. Koh, 2005. "Household Demand, Network Externality Effects and Intertemporal Price Discrimination," Working Papers 05-2005, Singapore Management University, School of Economics.
- D40 - Microeconomics - - Market Structure and Pricing - - - General
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