Competition or Predation? Schumpeterian Rivalry in Network Markets
AbstractWe explore the logic of predation and rules designed to prevent it in markets subject to network effects. Although, as many have informally argued, predatory behavior is plausibly more likely to succeed in such markets, we find that it is particularly hard to intervene in network markets in ways that improve welfare. We find that imposition of the leading proposals for rules against predatory pricing may lower or raise consumer welfare, depending on conditions that may be difficult to identify in practice.
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Bibliographic InfoPaper provided by University of California at Berkeley in its series Economics Working Papers with number E01-306.
Date of creation: 01 Aug 2001
Date of revision:
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Postal: University of California at Berkeley, Berkeley, CA USA
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Other versions of this item:
- Farrell, Joseph & Katz, Michael, 2001. "Competition or Predation? Schumpeterian Rivalry in Network Markets," Competition Policy Center, Working Paper Series qt6hs0v0pc, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Joseph Farrell & Michael Katz, 2002. "Competition or Predation? Schumpeterian Rivalry in Network Markets," Industrial Organization 0201003, EconWPA.
- Farrell, Joseph & Katz, Michael, 2001. "Competition or Predation? Schumpeterian Rivalry in Network Markets," Department of Economics, Working Paper Series qt5xw2d98g, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- D4 - Microeconomics - - Market Structure and Pricing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-11-05 (All new papers)
- NEP-ENT-2001-11-05 (Entrepreneurship)
- NEP-NET-2001-11-05 (Network Economics)
- NEP-POL-2001-11-05 (Positive Political Economics)
- NEP-TID-2001-11-05 (Technology & Industrial Dynamics)
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.:
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