COMPETITION, REGULATION AND WELFARE IN THE PRESENCE OF NETWORK EXTERNALITIES*

Antoine Soubeyran, Kotaro Suzumura and Shlomo Weber ()

The Japanese Economic Review, 2007, vol. 58, issue 1, 47-70

Abstract: In this paper we consider a simple model of an industry with network externalities, where a benefit to each consumer from network services depends on the size of the network. We first consider a single network and cover the cases with and without fixed cost of entry. We then turn to the two‐network industry, where the incumbent network and a new entrant network compete for the market and may differ both in their marginal costs and demand structures. In addition, we identify several situations where public policy may play a crucial role in sustaining socially advantageous network service provision.

Date: 2007
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https://doi.org/10.1111/j.1468-5876.2007.00350.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:jecrev:v:58:y:2007:i:1:p:47-70

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