Monopoly Pricing With Network Externalities

Luis M B Cabral (), David Joseph Salant () and Glenn Woroch
Additional contact information
Glenn Woroch: GTE Laboratories

Industrial Organization from EconWPA

Abstract: How should a monopolist price a durable good or a new technology that is subject to network externalities? In particular, should the monopolist set a low "introductory price" to attract a "critical mass" of adopters? In this paper, we provide intuition as to when and why introductory pricing might occur in the presence of network externalities. Incomplete information about demand or asymmetric information about costs are necessary for introductory pricing to occur in equilibrium.

JEL-codes: L (search for similar items in EconPapers)
Date: 1994-11-23
Note: 36?pp; postscript file, compressed; keywords: monopoly strategies, pricing
View list of references View citations in EconPapers

Downloads: (external link)
http://129.3.20.41/eps/io/papers/9411/9411003.pdf (application/pdf)
http://129.3.20.41/eps/io/papers/9411/9411003.ps.gz (application/postscript)

Related works:
Journal Article: Monopoly pricing with network externalities (1999)
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:wpa:wuwpio:9411003

Access Statistics for this paper

More papers in Industrial Organization from EconWPA
Series data maintained by EconWPA ().