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Coordinating adoption decisions under externalities and incomplete information

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  • Aoyagi, Masaki

Abstract

A monopolist sells a good whose value depends on the number of buyers who adopt it as well as on their private types. The seller coordinates the buyersʼ adoption decisions based on their reported types, and charges them the price based on the number of adoptions. We study ex post implementable sales schemes that are collusion-proof, and show that under the revenue maximizing scheme, more buyer types are willing to adopt when there are more adoptions, and the number of adoptions is maximized subject to the participation constraints.

Suggested Citation

  • Aoyagi, Masaki, 2013. "Coordinating adoption decisions under externalities and incomplete information," Games and Economic Behavior, Elsevier, vol. 77(1), pages 77-89.
  • Handle: RePEc:eee:gamebe:v:77:y:2013:i:1:p:77-89
    DOI: 10.1016/j.geb.2012.09.004
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    References listed on IDEAS

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    Cited by:

    1. Aoyagi, Masaki, 2018. "Bertrand competition under network externalities," Journal of Economic Theory, Elsevier, vol. 178(C), pages 517-550.
    2. Tatsuhiro Shichijo & Emiko Fukuda, 2019. "A dynamic game analysis of Internet services with network externalities," Theory and Decision, Springer, vol. 86(3), pages 361-388, May.
    3. Masaki Aoyagi, 2020. "Connecting Heterogeneous Agents under Incomplete Information," ISER Discussion Paper 1089, Institute of Social and Economic Research, Osaka University.
    4. Shichijo, Tatsuhiro & Fukuda, Emiko, 2021. "Cost-sharing mechanism for excludable goods with generalized non-rivalry," Journal of Economic Theory, Elsevier, vol. 193(C).
    5. Duan, Yongrui & Feng, Yixuan, 2021. "Optimal pricing in social networks considering reference price effect," Journal of Retailing and Consumer Services, Elsevier, vol. 61(C).

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    More about this item

    Keywords

    Network externalities; Strategy-proofness; Revenue maximization; Coalition; Collusion; User group;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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