IDEAS home Printed from
   My bibliography  Save this paper

On the incentive to attract competition with network effects


  • Gyu Ho Wang
  • Chongmin Kim


In this paper, we study the incumbent's incentive to share its essential facility when there exist network effects. We show that without network effects, the incumbent will charge an access fee high enough to deter the entry. with network effects, however, the incumbent always has an incentive to invite entry. We also show that if the potential entrant has to pay the entry cost, the incumbent has an incentive to subsidize the entrant with a low access fee

Suggested Citation

  • Gyu Ho Wang & Chongmin Kim, 2004. "On the incentive to attract competition with network effects," Econometric Society 2004 Far Eastern Meetings 572, Econometric Society.
  • Handle: RePEc:ecm:feam04:572

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item


    Network effects; Foreclosure; Essential facility; Access charge;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L5 - Industrial Organization - - Regulation and Industrial Policy


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecm:feam04:572. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.