Monopoly pricing with network externalities

  title={Monopoly pricing with network externalities},
  author={Lu{\'i}s M. B. Cabral and David J Salant and Glenn Woroch},
How should a monopolist price a durable good or a new technology that is subject to network externalities? In particular, should the monopolist set a low ‘‘introductory price’’ to attract a ‘‘critical mass’’ of adopters? In this paper, we provide intuition as to when and why introductory pricing might occur in the presence of network externalities. Incomplete information about demand or asymmetric information about costs is necessary for introductory pricing to occur in equilibrium when… CONTINUE READING
Highly Cited
This paper has 75 citations. REVIEW CITATIONS

1 Figure or Table


Citations per Year

76 Citations

Semantic Scholar estimates that this publication has 76 citations based on the available data.

See our FAQ for additional information.