Dynamic Oligopoly with Network Effects

Nicholas S. Economides () and Matt Mitchell

No 665, 2004 Meeting Papers from Society for Economic Dynamics

Abstract: We study the dynamics of an oligopoly market with network externalities. In contrast to earlier work, we consider a model where products are vertically differentiated and the number of firms is arbitrary. We show that the degree of network externalities has a one-to-one relationship with the number of firms that can survive. Moreover, we show that the market may overvalue high quality products, in the sense that the market equilibrium might lead to higher market shares for the high quality product than the planner would choose. We show that even in a world with linear demand, the market shares of three firms can cycle

Keywords: Network Externalities; Industry Dynamics (search for similar items in EconPapers)
JEL-codes: L13 L15 (search for similar items in EconPapers)
Date: 2004

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:red:sed004:665

Access Statistics for this paper

More papers in 2004 Meeting Papers from Society for Economic Dynamics
Address: Society for Economic Dynamics Anne Stubing CV Starr Center for Applied Economics 269 Mercer Street, Room 303 New York University New York, NY 10003
Contact information at EDIRC.
Series data maintained by Christian Zimmermann ().