Network Externality and the Coordination Problem: A Generalization of Rohlfs's Model

Lambertini, Luca ; Orsini, Raimondello (2003) Network Externality and the Coordination Problem: A Generalization of Rohlfs's Model. Bologna: Dipartimento di Scienze economiche DSE, p. 9. DOI 10.6092/unibo/amsacta/4823. In: Quaderni - Working Paper DSE (471). ISSN 2282-6483.
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Abstract

We show that Rholfs's (1974) model is a special case of a spatial monopoly model à la Hotelling (1929) with quadratic transportation costs, where location is exogenous and the good yealds no intrinsic utility. By relaxing these assumptions, we prove that the coordination problem typically thought to affect markets for network goods may not arise in general. Endogenizing location makes it easier for the monopolist to extract consumer surplus but also to cover the entire market.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Orsini, Raimondello
Keywords
monopoly, network externally, critical mass
Subjects
ISSN
2282-6483
DOI
Deposit date
10 Mar 2016 09:47
Last modified
10 Mar 2016 09:47
URI

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