Network externalities and differentiation in an entry model

Stefano Colombo ()

Economics Bulletin, 2011, vol. 31, issue 1, 75-84

Abstract: In a market characterized by network externalities, we consider a situation in which an established incumbent faces a new entrant: the differentiation degree chosen by the entrant increases with the network externalities, while the price set by the incumbent initially increases with the network externalities but eventually it decreases with the network externalities.

Keywords: Network externalities; differentiation; entrance (search for similar items in EconPapers)
JEL-codes: D4 L1 (search for similar items in EconPapers)
Date: 2011-01-04
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