Household Demand, Network Externality Effects and Intertemporal Price Discrimination

Winston Koh

Microeconomics Working Papers from East Asian Bureau of Economic Research

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.

Keywords: Intertemporal price discrimination; durable good; household demand; network externality (search for similar items in EconPapers)
JEL-codes: D40 (search for similar items in EconPapers)
Date: 2005-01
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Related works:
Journal Article: 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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