General Network Effects and Welfare

Rufus Pollock ()

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: (In)direct network effects arise frequently in economic models but, for reasons of analytical tractability, are often assumed to be linear. Here, we examine the general non-linear case with two platforms. We establish the conditions characterising equilibria and show that welfare changes can be related in a simple, intuitive way to the degree of diminishing returns of the network effects function.

Keywords: Network Effects; Indirect Network Effects; Platforms; Welfare (search for similar items in EconPapers)
JEL-codes: L13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ind, nep-mic and nep-net
Date: 2009-04-07
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Persistent link: http://EconPapers.repec.org/RePEc:cam:camdae:0915

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