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A note on expanding networks and monopoly pricing

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  • GABSZEVIWZ, Jean J.
  • GARCIA, Filomena

Abstract

We obtain explicitly the optimal path of prices for a monopolist operating in a network industry during a finite number of periods. We describe this optimal path as a function of network intensity and horizon length and show that the prices are increasing in time and that, for very low network intensity, or very high horizon length, the monopolist will offer the good at zero price in the initial period.
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Suggested Citation

  • GABSZEVIWZ, Jean J. & GARCIA, Filomena, 2009. "A note on expanding networks and monopoly pricing," LIDAM Reprints CORE 1994, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:1994
    DOI: 10.1016/j.econlet.2007.03.012
    Note: In : Economics Letters, 98, 9-15, 2008
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    Cited by:

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    3. Hashimoto, Kaito & Matsubayashi, Nobuo, 2014. "A note on dynamic monopoly pricing under consumption externalities," Economics Letters, Elsevier, vol. 124(1), pages 1-8.
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    5. Huseyin Gurkan & Francis de Véricourt, 2020. "Contracting, pricing, and data collection under the AI flywheel effect," ESMT Research Working Papers ESMT-20-01_R3, ESMT European School of Management and Technology, revised 17 Aug 2021.
    6. Laussel, Didier & Van Long, Ngo & Resende, Joana, 2015. "Network effects, aftermarkets and the Coase conjecture: A dynamic Markovian approach," International Journal of Industrial Organization, Elsevier, vol. 41(C), pages 84-96.
    7. Xiaofang Wang & Yaoyao Yang & Jun Zhuang, 2023. "Pricing Decisions with Social Interactions: A Game-Theoretic Model," Decision Analysis, INFORMS, vol. 20(1), pages 40-54, March.
    8. Hamed Ghoddusi & Alexander Rodivilov & Baran Siyahhan, 2019. "Two-sided markets : the role of technological uncertainty," Working Papers hal-02447328, HAL.
    9. Ngo Long, 2015. "Dynamic Games Between Firms and Infinitely Lived Consumers: A Review of the Literature," Dynamic Games and Applications, Springer, vol. 5(4), pages 467-492, December.
    10. Huseyin Gurkan & Francis de Véricourt, 2022. "Contracting, Pricing, and Data Collection Under the AI Flywheel Effect," Management Science, INFORMS, vol. 68(12), pages 8791-8808, December.
    11. Garcia Filomena, 2013. "When Should a Monopolist Improve Quality in a Network Industry?," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 13(1), pages 1-34, September.
    12. Huseyin Gurkan & Francis de Véricourt, 2020. "Contracting, pricing, and data collection under the AI flywheel effect," ESMT Research Working Papers ESMT-20-01_R2, ESMT European School of Management and Technology, revised 17 May 2021.

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