Network Externalities in a Dynamic Monopoly

Orsini, Raimondello ; Lambertini, Luca (2002) Network Externalities in a Dynamic Monopoly. Bologna: Dipartimento di Scienze economiche DSE, p. 8. DOI 10.6092/unibo/amsacta/4843. In: Quaderni - Working Paper DSE (452). ISSN 2282-6483.
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Abstract

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 (i) characterize saddle poin equilibria, (ii) prove that the extent of market coverage is increasing in the network effect and (iii) unlike the existing static literature on the same problem, the monopolixt may not make introductory price offers. Then, we briefly dea with the socially optimal solution, showing that, in general, a planner would serve more consumers than a profit-seaking monopolist.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Orsini, Raimondello
Lambertini, Luca
Keywords
network externality, spacial monopoly, capital accumulation,optimal control
Subjects
ISSN
2282-6483
DOI
Deposit date
14 Mar 2016 16:00
Last modified
14 Mar 2016 16:00
URI

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