|
EconStor >
Heinrich-Heine-Universität Düsseldorf >
Düsseldorf Institute for Competition Economics (DICE), University of Düsseldorf >
DICE Discussion Paper, Düsseldorf Institute for Competition Economics (DICE) >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/43666
|
| | |
| Title: | | On the role of consumer expectations in markets with network effects  |
| Authors: | | Suleymanova, Irina Wey, Christian |
| Issue Date: | | 2010 |
| Series/Report no.: | | DICE discussion paper 13 |
| Abstract: | | We analyze the role of consumer expectations in a Hotelling model of price competition when products exhibit network effects. Expectations can be strong (stubborn), weak (price-sensitive) or partially stubborn (a mix of weak and strong). As a rule, the price-sensitivity of demand declines when expectations are more stubborn. An increase of stubbornness i) reduces competition, ii) increases (decreases) the parameter region with a unique duopoly equilibrium (multiple equilibria), iii) reduces the conflict between consumer and social preferences for de facto standardization, and iv) reduces the misalignment between consumer and social preferences for compatibility. |
| Subjects: | | Network Effects Expectations Duopoly Compatibility Welfare |
| JEL: | | D43 D84 L13 |
| ISBN: | | 978-3-86304-012-3 |
| Document Type: | | Working Paper |
| Appears in Collections: | | DICE Discussion Paper, Düsseldorf Institute for Competition Economics (DICE)
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/43666
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|