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Network externalities in a dynamic monopoly.
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- Author(s): Lamberlini, Luca; Orsini, Raimondello
- Source:
Central European Journal of Operations Research; Mar2007, Vol. 15 Issue 1, p105-117, 13p- Subject Terms:
- Source:
- Additional Information
- 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 (1) characterise saddle point equilibria, (2) prove that the extent of market coverage is increasing in the network effect and (3) unlike the existing static literature on the same problem, the monopolist may not make introductory price offers. Then, we briefly deal with the socially optimal solution, showing that, in general, a planner would serve more consumers than a profit-seeking monopolist. [ABSTRACT FROM AUTHOR]
- Abstract: Copyright of Central European Journal of Operations Research is the property of Springer Nature and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
- Abstract:
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