Pricing of Durable Network Goods under Dynamic Coordination Failure ∗

@inproceedings{Sekiguchi2009PricingOD,
  title={Pricing of Durable Network Goods under Dynamic Coordination Failure ∗},
  author={Tadashi Sekiguchi},
  year={2009}
}
We study markets of durable goods with network externalities, and characterize the equilibria of a game where a monopolistic firm first commits to its price and then consumers make purchase decisions. Due to durability, the consumers play a coordination game in a dynamic context. A major contribution of this paper is to fully characterize the equilibrium consequences of the dynamic coordination game, in terms of the firm’s profit. Based on this characterization, we derive all equilibrium… CONTINUE READING