Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/253536 
Authors: 
Year of Publication: 
2021
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 16 [Issue:] 3 [Publisher:] The Econometric Society [Place:] New Haven, CT [Year:] 2021 [Pages:] 1017-1053
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We investigate how information goods are priced and diffused over links in a network. A new equivalence relation between nodes captures the effects of network architecture and locations of sellers on the division of profits, and characterizes the topology of competing (and potentially overlapping) diffusion paths. Sellers indirectly appropriate profits over intermediation chains from buyers in their equivalence classes. Links within the same class constitute bottlenecks for information diffusion and confer monopoly power. Links that bridge distinct classes are redundant for diffusion and generate competition among sellers. In dense networks, competition limits the scope of indirect appropriability and intellectual property rights foster innovation.
Subjects: 
Networks
diffusion
indirect appropriability
captive markets
intermediation
competition
bottlenecks
redundant links
information goods
copying
intellectual property
JEL: 
C78
D85
L14
O33
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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