Cost Pass-Through with Network Externalities

Anna Laura Baraldi () and Christian Rojas
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Christian Rojas: Department of Resource Economics, University of Massachusetts¡XAmherst, U.S.A.

International Journal of Business and Economics, 2011, vol. 10, issue 3, 177-199

Abstract: We analyze the rate at which cost shocks are passed through to prices when the market exhibits network externalities. We find that the pass-through rate is smaller in the presence of network externalities. Also, the deadweight loss created by a cost shock is smaller in a network market.

Keywords: network externalities; cost pass-through; deadweight loss (search for similar items in EconPapers)
JEL-codes: D6 D85 H23 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ijb:journl:v:10:y:2011:i:3:p:177-199

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