The value of network information: Assortative mixing makes the difference

Mohamed Belhaj and Frédéric Deroïan

Games and Economic Behavior, 2021, vol. 126, issue C, 428-442

Abstract: A monopoly sells a network good to a large population of consumers. We explore how the monopoly's profit and the consumer surplus vary with the arrival of public information about the network structure. The analysis reveals that, under homogeneous preferences for the good, degree assortativity ensures that information arrival increases both profit and consumer surplus. In contrast, heterogeneous preferences for the good can create a tension between consumer surplus and profit.

Keywords: Monopoly; Network effects; Network information; Bonacich centrality; Degree assortativity; Assortative mixing (search for similar items in EconPapers)
JEL-codes: C72 D85 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:126:y:2021:i:c:p:428-442

DOI: 10.1016/j.geb.2020.12.008

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