New Network Goods
New horizontally-differentiated goods involving product-specific network effects are quite prevalent. Consumers market-wide preference for each of these goods typically is initially unknown. Later, as sales data begin to accumulate, agents learn market-wide preferences, which thus become common knowledge. We study such a market, pinpointing the factors which determine whether the market-wide preferred firm reinforces its lead as time elapses, penetration and under-cost pricing prevail, and first- or last-mover effects in market-wide preferences occur.
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- Farrell, Joseph & Klemperer, Paul, 2006.
"Coordination and Lock-In: Competition with Switching Costs and Network Effects,"
Competition Policy Center, Working Paper Series
qt9n26k7v1, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Farrell, Joseph & Klemperer, Paul, 2007. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Handbook of Industrial Organization, Elsevier.
- Joseph Farrell & Paul Klemperer, 2006. "Co-ordination and Lock-in: Competition with Switching Costs and Network Effects," Economics Papers 2006-W07, Economics Group, Nuffield College, University of Oxford.
- Farrell, Joseph & Klemperer, Paul, 2006. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," CEPR Discussion Papers 5798, C.E.P.R. Discussion Papers.
- S. J. Liebowitz & Stephen E. Margolis, 1994. "Network Externality: An Uncommon Tragedy," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 133-150, Spring.
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