Firm Discrimination Pricing Strategies with Network Effect

Abstract:

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We explore the price and welfare effect of price discrimination in a differentiated-goods oligopoly market with network effect and the effect of network effect on the equilibrium price, profit and output. We show that competitive price discrimination and network effect may intensify competition and the price discrimination increases the social welfare under oligopoly market with network effect. If firms differ in which markets they target for aggressive pricing strategy and competitive firm’s reaction is strong, prices in all markets may fall. So both firms agree on the strategies of setting the uniform pricing.

Info:

Periodical:

Materials Science Forum (Volumes 532-533)

Edited by:

Chengyu Jiang, Geng Liu, Dinghua Zhang and Xipeng Xu

Pages:

941-944

DOI:

10.4028/www.scientific.net/MSF.532-533.941

Citation:

X. J. Pan et al., "Firm Discrimination Pricing Strategies with Network Effect", Materials Science Forum, Vols. 532-533, pp. 941-944, 2006

Online since:

December 2006

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Price:

$35.00

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