Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108062
Authors: 
Csorba, Gergely
Year of Publication: 
2004
Series/Report no.: 
IEHAS Discussion Papers MT-DP - 2004/14
Abstract: 
Based on the critical assumption of strategic complementarity, this paper builds a general model to describe and solve the screening problem faced by the monopolist seller of a network good. By applying monotone comparative static tools, we demonstrate that the joint presence of asymmetric information and positive network effects leads to a strict downward distortion for all consumers in the quantities provided. We also show that the equilibrium allocation is an increasing function of the intensity of network effects, and that a discriminating monopoly may supply large quantities for all consumers than a competitive industry.
Subjects: 
network effects
strategic complementarities
contracting with externalities
second-degree discrimination
monotone comparative statics
JEL: 
D42
D62
D82
L12
Document Type: 
Working Paper

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