Monopoly Pricing With Network Externalities

Luis Cabral, David Salant and Glenn Woroch ()

Industrial Organization from University Library of Munich, Germany

Abstract: How should a monopolist price a durable good or a new technology that is subject to network externalities? In particular, should the monopolist set a low "introductory price" to attract a "critical mass" of adopters? In this paper, we provide intuition as to when and why introductory pricing might occur in the presence of network externalities. Incomplete information about demand or asymmetric information about costs are necessary for introductory pricing to occur in equilibrium.

JEL-codes: L (search for similar items in EconPapers)
Date: 1994-11-23
Note: 36?pp; postscript file, compressed; keywords: monopoly strategies, pricing
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/io/papers/9411/9411003.pdf (application/pdf)
https://econwpa.ub.uni-muenchen.de/econ-wp/io/papers/9411/9411003.ps.gz (application/postscript)

Related works:
Journal Article: Monopoly pricing with network externalities (1999)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpio:9411003

Access Statistics for this paper

More papers in Industrial Organization from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ( this e-mail address is bad, please contact ).