Arbeitspapier
Network markets and consumer coordination
This paper assumes that groups of consumers in network markets can coordinate their choices when it is in their best interest to do so, and when coordination does not require communication. It is shown that multiple asymmetric networks can coexist in equilibrium if consumers have heterogeneous reservation values. A monopolist provider might choose to operate multiple networks to price differentiate consumers on both sides of the market. Competing network providers might operate networks such that one of them targets high reservation value consumers on one side of the market, while the other targets high reservation value consumers on the other side. Firms can obtain positive profits in price competition. In these asymmetric equilibria product differentiation is endogenized by the network choices of consumers. Heterogeneity of consumers is necessary for the existence of this type of equilibrium.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 1317
- Classification
-
Wirtschaft
Market Structure, Firm Strategy, and Market Performance: General
Externalities
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
- Subject
-
Network Externalities
Verbraucher
Koordination
Monopol
Duopol
Theorie
- Event
-
Geistige Schöpfung
- (who)
-
Ambrus, Attila
Argenziano, Rossella
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2004
- Handle
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
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Object type
- Arbeitspapier
Associated
- Ambrus, Attila
- Argenziano, Rossella
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2004
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