Monopoly pricing of social goods

Pekka Sääskilahti

MPRA Paper from University Library of Munich, Germany

Abstract: We analyse the roles of social network topology and size on the monopoly pricing of network goods in a market, where consumers interact with each other and are characterised by their social relations. The size effect is the well-known network externalities phenomenon, while the topological effect has not been previously studied in this context. The topological effect works against, and dominates, the size effect in monopoly pricing by reducing the monopoly's capacity to extract consumer surplus. Under asymmetric information about consumer types, the monopoly prefers symmetric network topologies, but the social optimum is an asymmetric network.

Keywords: social relations; networks; coordination; monopoly (search for similar items in EconPapers)
JEL-codes: D42 D82 L14 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-com, nep-mic, nep-mkt, nep-net and nep-soc
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Related works:
Journal Article: Monopoly Pricing of Social Goods (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:3526

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