EconPapers    
Economics at your fingertips  
 

Comment on “Price and quantity competition in network goods duopoly: A reversal resultâ€

Tsuyoshi Toshimitsu

Economics Bulletin, 2019, vol. 39, issue 3, 1855-1859

Abstract: Based on the utility function of Hoernig (2012), who introduces network externalities, Pal (2014) considers some of the classic issues related to Cournot and Bertrand equilibria, e.g., Singh and Vives (1984), and demonstrates that profit under Bertrand equilibrium is higher than that under Cournot equilibrium if the degree of network externalities is sufficiently large. In this note, focusing on the role of consumer expectations, i.e., active and passive expectations, of network sizes, we demonstrate that the main result of Pal (2014) does not hold under active expectations. Furthermore, we compare profits, outputs, and consumer surplus in equilibrium in the cases of active and passive expectations.

Keywords: Cournot and Bertrand competition; network externality; horizontally differentiated duopoly; fulfilled expectation; active and passive expectations (search for similar items in EconPapers)
JEL-codes: D2 L1 (search for similar items in EconPapers)
Date: 2019-08-11
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2019/Volume39/EB-19-V39-I3-P173.pdf (application/pdf)

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:ebl:ecbull:eb-19-00067

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().

 
Page updated 2019-10-10
Handle: RePEc:ebl:ecbull:eb-19-00067