Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96076
Authors: 
Ruffle, Bradley J.
Weiss, Avi
Etziony, Amir
Year of Publication: 
2010
Series/Report no.: 
Working Papers, Bar-Ilan University, Department of Economics 2010-03
Abstract: 
A network market is a market in which the benefit each consumer derives from a good is an increasing function of the number of consumers who own the same or similar goods. A major obstacle that plagues the introduction of a network good is the ability to reach critical mass, namely, the minimum number of buyers required to render purchase worthwhile. This can be likened to a coordination game with multiple Pareto-ranked equilibria. We introduce an experimental paradigm to study consumers' ability to coordinate on purchasing the network good. Our results highlight the central importance of the level of the critical mass.
Subjects: 
experimental economics
network goods
coordination game
critical mass
JEL: 
C92
L19
Document Type: 
Working Paper

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