The value of network information: Assortative mixing makes the difference

Mohamed Belhaj () and Frédéric Deroïan ()
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Mohamed Belhaj: AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique

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Abstract: A monopoly sells a network good to a large population of consumers. We explore how the monopoly's profit and the consumer surplus vary with the arrival of public information about the network structure. The analysis reveals that, under homogeneous preferences for the good, degree assortativity ensures that information arrival increases both profit and consumer surplus. In contrast, heterogeneous preferences for the good can create a tension between consumer surplus and profit.

Keywords: monopoly; network effects; network information; Bonacich centrality; degree assortativity; assortative mixing (search for similar items in EconPapers)
Date: 2021-03
New Economics Papers: this item is included in nep-gth, nep-mic, nep-net and nep-reg
Note: View the original document on HAL open archive server: https://amu.hal.science/hal-03160602v1
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Published in Games and Economic Behavior, 2021, 126, pp.428-442. ⟨10.1016/j.geb.2020.12.008⟩

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Related works:
Working Paper: The Value of Network Information: Assortative Mixing Makes the Difference (2016)
Working Paper: The Value of Network Information: Assortative Mixing Makes the Difference (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03160602

DOI: 10.1016/j.geb.2020.12.008

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