Positive Network Externalities and Negative Environmental Externalities in a Differentiated Duopoly With Entry Fee‐Refund Policy

Di Wu, Jen‐Yao Lee and Leonard F. S. Wang

American Journal of Economics and Sociology, 2025, vol. 84, issue 5, 773-779

Abstract: Most of the studies on the implications of externalities rarely consider the coexistence of positive network externalities and negative externalities. This paper examines the effect of net externalities in price competition and the effectiveness of the entry fee‐refund policy. We show that the positive network externalities improve profits, consumer surplus, and social welfare, while negative externalities reduce them. The implementation of an entry fee‐refund policy reduces firms' profits, but further improves consumer surplus and social welfare. An increase of positive network externalities makes such policy more effective, but the effect is weakened by negative externalities.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/ajes.12631

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: https://EconPapers.repec.org/RePEc:bla:ajecsc:v:84:y:2025:i:5:p:773-779

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0002-9246

Access Statistics for this article

American Journal of Economics and Sociology is currently edited by Laurence S. Moss

More articles in American Journal of Economics and Sociology from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().