A Note on Quality Choice, Monopoly, and Network Externality

Tsuyoshi Toshimitsu

Journal of Industry, Competition and Trade, 2007, vol. 7, issue 2, 142 pages

Abstract: Introducing network externalities into a model of vertically differentiated products, Lambertini and Orsini (2001, 2003) analyze the implications of a monopolist’s quality choice for social optimum. Moreover, they examine how the network externality affects quality, quantity, price, and social surplus. In this note, by looking at the nature of cost functions and the degree of network externalities, we reconsider their results, at least some of which depend upon the specificity of the cost functions. Copyright Springer Science+Business Media, LLC 2007

Keywords: network externality; quality choice; vertically differentiated product; monopoly; D42; L12; L15 (search for similar items in EconPapers)
Date: 2007
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DOI: 10.1007/s10842-006-0003-5

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