Household Demand, Network Externality Effects and Intertemporal Price Discrimination

Winston Koh

Journal of Economics, 2005, vol. 84, issue 1, 49-69

Abstract: This paper examines the optimality of intertemporal price discrimination when network externality effects are present in the consumption of a durable good. We conduct our study in two settings. In a model with two household types, utilities are dependent on the cumulative proportion of households that have purchased the durable good. Next, in a model with a continuum of household types, we extend the analysis to the case where households consume both a durable good and a stream of non-durable goods. We show that in both settings, the presence of network externalities facilitates a sales strategy with intertemporal price discrimination. Copyright Springer-Verlag Wien 2005

Keywords: intertemporal price discrimination; durable good; household demand; network externality; D40 (search for similar items in EconPapers)
Date: 2005
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Working Paper: Household Demand, Network Externality Effects and Intertemporal Price Discrimination (2005)
Working Paper: Household Demand, Network Externality Effects and Intertemporal Price Discrimination (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:84:y:2005:i:1:p:49-69

DOI: 10.1007/s00712-004-0100-z

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