Arbeitspapier
On the role of consumer expectations in markets with network effects
We analyze the role of consumer expectations in a Hotelling model of price competition when products exhibit network effects. Expectations can be strong (stubborn), weak (price-sensitive) or partially stubborn (a mix of weak and strong). As a rule, the price-sensitivity of demand declines when expectations are more stubborn. An increase of stubbornness i) reduces competition, ii) increases (decreases) the parameter region with a unique duopoly equilibrium (multiple equilibria), iii) reduces the conflict between consumer and social preferences for de facto standardization, and iv) reduces the misalignment between consumer and social preferences for compatibility.
- ISBN
-
978-3-86304-012-3
- Sprache
-
Englisch
- Erschienen in
-
Series: DICE Discussion Paper ; No. 13
- Klassifikation
-
Wirtschaft
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Expectations; Speculations
Oligopoly and Other Imperfect Markets
- Thema
-
Network Effects
Expectations
Duopoly
Compatibility
Welfare
Preiswettbewerb
Network Externalities
Hotelling Modell
Konsumtheorie
Erwartungstheorie
Duopol
Wohlfahrtseffekt
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Suleymanova, Irina
Wey, Christian
- Ereignis
-
Veröffentlichung
- (wer)
-
Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
- (wo)
-
Düsseldorf
- (wann)
-
2010
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Suleymanova, Irina
- Wey, Christian
- Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
Entstanden
- 2010
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