Network externalities in a dynamic monopoly
We reconsider the role of network externalities in a dynamic spatial monopoly where the firm must invest in order to accumulate capacity, while consumers may have either linear or quadratic preferences. We (1) characterise saddle point equilibria, (2) prove that the extent of market coverage is increasing in the network effect and (3) unlike the existing static literature on the same problem, the monopolist may not make introductory price offers. Then, we briefly deal with the socially optimal solution, showing that, in general, a planner would serve more consumers than a profit-seeking monopolist. Copyright Springer-Verlag 2007
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Volume (Year): 15 (2007)
Issue (Month): 1 (March)
Pages: 105-117
| Handle: | RePEc:spr:cejnor:v:15:y:2007:i:1:p:105-117 |
| DOI: | 10.1007/s10100-006-0020-9 |
| Contact details of provider: | Web page: http://www.springer.com Web page: http://www.fhi.sk/ssov Web page: http://www.mot.org.hu/index_en.html Web page: http://nb.vse.cz/csov/english.htm Web page: http://www.oegor.at/ Web page: http://www.drustvo-informatika.si/sekcije/sor/ Web page: http://hdoi.hr/en_US/en/
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| Order Information: | Web: http://www.springer.com/business/operations+research/journal/10100 |
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.:
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