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Market size effects on long-run demand of a network good

Author

Listed:
  • Dai Zusai

    (Department of Economics, Temple University)

Abstract

We consider optimal dynamic pricing under a network externality. We construct the demand dynamic of the network good from the aggregate best response dynamic of agents who have different adoption costs. When the distribution of adoption costs is convex, expansion of potential market inevitably enlarges long-run demand.

Suggested Citation

  • Dai Zusai, 2015. "Market size effects on long-run demand of a network good," Economics Bulletin, AccessEcon, vol. 35(4), pages 2768-2775.
    • Handle: RePEc:ebl:ecbull:eb-14-00436
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2015/Volume35/EB-15-V35-I4-P276.pdf
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    References listed on IDEAS

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    6. Becker, Gary S, 1991. "A Note on Restaurant Pricing and Other Examples of Social Influences on Price," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1109-1116, October.
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    Cited by:

    1. Dai Zusai, 2023. "Evolutionary dynamics in heterogeneous populations: a general framework for an arbitrary type distribution," International Journal of Game Theory, Springer;Game Theory Society, vol. 52(4), pages 1215-1260, December.

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    More about this item

    Keywords

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    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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