This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Monopoly Pricing With Network Externalities

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Luis Cabral (Universidade Nova de Lisboa and CEPR)
David Salant (GTE Laboratories Incorporated)
Glenn Woroch (GTE Laboratories)

Additional information is available for the following registered author(s):

Abstract

How should a monopolist price a durable good or a new technology that is subject to network externalities? In particular, should the monopolist set a low "introductory price" to attract a "critical mass" of adopters? In this paper, we provide intuition as to when and why introductory pricing might occur in the presence of network externalities. Incomplete information about demand or asymmetric information about costs are necessary for introductory pricing to occur in equilibrium.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. 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.

File URL: http://129.3.20.41/eps/io/papers/9411/9411003.pdf
File Format: application/pdf
File Function:
Download Restriction: no
File URL: http://129.3.20.41/eps/io/papers/9411/9411003.ps.gz
File Format: application/postscript
File Function:
Download Restriction: no

Publisher Info
Paper provided by EconWPA in its series Industrial Organization with number 9411003.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: 23 Nov 1994
Date of revision:
Handle: RePEc:wpa:wuwpio:9411003

Note: 36?pp; postscript file, compressed; keywords: monopoly strategies, pricing
Contact details of provider:
Web page: http://129.3.20.41

For technical questions regarding this item, or to correct its listing, contact: (EconWPA).

Related research
Keywords:

Other versions of this item:

Find related papers by JEL classification:
L - Industrial Organization

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.:

  1. Hart, Oliver D & Tirole, Jean, 1988. "Contract Renegotiation and Coasian Dynamics," Review of Economic Studies, Blackwell Publishing, vol. 55(4), pages 509-40, October. [Downloadable!] (restricted)
    Other versions:
  2. Joseph Farrell & Garth Saloner, 1984. "Standardization, Compatibility and Innovation," Working papers 345, Massachusetts Institute of Technology (MIT), Department of Economics.
    Other versions:
  3. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-40, June. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, 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.)

  1. Jong-Hee Hahn, 2001. "The Welfare Effect of Quality Degradation in the Presence of Network Externalities," Keele Department of Economics Discussion Papers (1995-2001) 2001/08, Department of Economics, Keele University, revised Feb 2003. [Downloadable!]
    Other versions:
  2. Timothy F Bresnahan, 2004. "Network Effects in the Microsoft Case," Levine's Working Paper Archive 228400000000000008, David K. Levine. [Downloadable!]
  3. Sääskilahti, Pekka, 2007. "Monopoly pricing of social goods," MPRA Paper 3526, University Library of Munich, Germany. [Downloadable!]
  4. GABSZEWICZ, Jean J. & GARCIA, Filomena, 2005. "A note on expanding networks and monopoly pricing," CORE Discussion Papers 2005095, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
    Other versions:
  5. Di Maria, Corrado & Köttl, Johannes, 2002. "Lagged Network Externalities and Rationing in a Software Monopoly," Economics Series 120, Institute for Advanced Studies. [Downloadable!]
  6. Arun Sundararajan, 2003. "Network Effects, Nonlinear Pricing and Entry Deterrence," Industrial Organization 0307002, EconWPA. [Downloadable!]
  7. Gerard Llobet & Michael Manove, 2006. "Network Size and Network Capture," Boston University - Department of Economics - Working Papers Series WP2006-007, Boston University - Department of Economics. [Downloadable!]
    Other versions:
  8. Jullien, Bruno, 2001. "Competing with Network Externalities and Price Discrimination," CEPR Discussion Papers 2883, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  9. Ralph C Bayer & Mickey Chan, 2004. "Network Externalities, Demand Inertia and Dynamic Pricing in an Experimental Oligopoly Market," Experimental 0412004, EconWPA. [Downloadable!]
    Other versions:
  10. Sääskilahti, Pekka, 2006. "Buying Decision Coordination and Monopoly Pricing of Network Goods," MPRA Paper 5106, University Library of Munich, Germany. [Downloadable!]
  11. Jean Gabszewicz & Filomena Garcia, 2007. "Optimal Monopoly Price Paths with Expanding Networks," Review of Network Economics, Concept Economics, vol. 6(1), pages 42-49, March. [Downloadable!]
  12. Frederick R. Warren-Boulton & Kenneth C. Baseman & Glenn A. Woroch, 1994. "The Economics of Intellectual Property Protection for Software: The Proper Role for Copyright," Industrial Organization 9411004, EconWPA. [Downloadable!]
  13. Winston T.H. Koh, 2005. "Household Demand, Network Externality Effects and Intertemporal Price Discrimination," Working Papers 05-2005, Singapore Management University, School of Economics. [Downloadable!]
    Other versions:
  14. Nicholas Economides, 1999. "Durable Goods Monopoly with Network Externalities with Application to the PC Operating Systems Market," Working Papers 99-17, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
    Other versions:
  15. Jay Kesan & Andres Gallo, 2006. "Why are the United States and the European Union failing to regulate the internet efficiently? Going beyond the bottom-up and top-down alternatives," European Journal of Law and Economics, Springer, vol. 21(3), pages 237-266, May. [Downloadable!] (restricted)
  16. Luis Cabral, 2007. "Lock in and Switch: Asymmetric Information and New Product Diffusion," Working Papers 07-11, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
  17. L. Lambertini & R. Orsini, 2004. "R&D for Quality Improvement and Network Externalities," Working Papers 516, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  18. Jong-Hee Hahn, 2000. "Functional Quality Degradation of Software with Network Externalities," Keele Department of Economics Discussion Papers (1995-2001) 2000/12, Department of Economics, Keele University, revised Jan 2001. [Downloadable!]
  19. Maarten C.W. Janssen & Ewa Mendys, 2000. "Adoption of Superior Technology in Markets with Heterogeneous Network Externalities and Price Competition," Tinbergen Institute Discussion Papers 00-087/1, Tinbergen Institute. [Downloadable!]
Statistics
Access and download statistics

Did you know? It is the publishers that input data about their publications, as there is no staff at RePEc.

This page was last updated on 2009-11-13.


This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.