Adriaan Ten Kate (Head of the Economics Directorate, Federal Competition Commission, Mexico) Gunnar Niels () (Director, Oxera, UK)
Abstract
Static demand models for homogeneous network goods give rise to fulfilled-expectations equilibrium demand (FEED) curves, which, contrary to normal demand curves, may be upward sloping at certain intervals. We analyze some, as yet unexplored, properties of the FEED curves. We spell out the one-shot non-cooperative game, the Nash equilibria of which constitute the FEED curve. We show that, in a network environment, pricing below marginal cost may be required to reach critical mass, and competition could represent an obstacle to network development rather than being its driving force.
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Volume (Year): 5 (2006) Issue (Month): 3 (September) Pages: 320-336 Download reference. The following formats are available: HTML
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References listed on IDEAS 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.:
Nicholas Economides, 1995.
"The Economics of Networks,"
Working Papers
94-24, New York University, Leonard N. Stern School of Business, Department of Economics, revised Sep 1995.
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