Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108090
Authors: 
Ambrus, Attila
Argenziano, Rossella
Year of Publication: 
2004
Series/Report no.: 
IEHAS Discussion Papers MT-DP - 2004/23
Abstract: 
This paper analyzes pricing decisions and competition in network markets, assuming that groups of consumers can coordinate their choices when it is in their interest, if coordination does not require communication. It is shown that multiple asymmetric networks can coexist in equilibrium. A monopolist might operate multiple ex ante identical networks to price differentiate. In Bertrand competition different firms might target high reservation value consumers on different sides of the market. Firms can obtain positive profits in price competition. Product differentiation in equilibrium is endogenized by consumers' network choices. Enough heterogeneity in reservation values is necessary for existence of these asymmetric equilibria.
Subjects: 
two-sided markets
network externalities
platform competition
coordination
JEL: 
D43
D62
L11
L14
ISBN: 
9639588245
Document Type: 
Working Paper

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