Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/307463 
Authors: 
Year of Publication: 
2024
Series/Report no.: 
ISER Discussion Paper No. 1267
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
This paper studies the relationship between optimal dynamic pricing for network goods and the coordination of consumers' adoption decisions. We show that based on risk dominance criterion, consumers face the risk of coordination failure, and introductory pricing is optimal if the risk is higher in period 1 without network. We find that under threshold coordination, the impact of price on the network size varies according to consumer beliefs. In pessimistic (optimistic) threshold coordination, the network size expands (shrinks) as the price increases. Lowering (Raising) the price in period 2 implies a smaller network size, so introductory (skim) pricing is optimal.
Subjects: 
Network Externalities
Dynamic Pricing
Coordination Game
Document Type: 
Working Paper

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