Prices and Deadweight Loss in Multi-Product Monopoly

Rabah Amir (), Jim Y. Jin, Gerald Pech () and Michael Tröge ()
Additional contact information
Jim Y. Jin: University of St Andrews
Michael Tröge: ESCP-Europe

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: This paper provides a thorough analysis of oligopolistic markets with positive demand-side network externalities and perfect compatibility. The minimal structure imposed on the model primitives is such that industry output increases in a firm's rivals' total output as well as in the expected network size. This leads to a generalized equilibrium existence treatment that includes guarantees for a nontrivial equilibrium, and some insight into possible multiplicity of equilibria. We formalize the concept of industry viability and show that it is always enhanced by having more firms in the market and/or by technological improvements. We also characterize the e¤ects of market structure on industry performance, with an emphasis on departures from standard markets. The approach relies on lattice-theoretic methods, which allow for a unified treatment of various general results in the literature on network goods. Several illustrative examples with closed-form solutions are also provided.

Keywords: multi-product monopoly prices; interdependent products; pricing complements; pricing substitutes; linear demand (search for similar items in EconPapers)
JEL-codes: D42 L12 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-com and nep-ind
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Prices and Deadweight Loss in Multiproduct Monopoly (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:10-15

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