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Asymmetric Networks in Two-Sided Markets

Ambrus, Attila and Argenziano, Rossella (2009) 'Asymmetric Networks in Two-Sided Markets.' American Economic Journal: Microeconomics, 1 (1). pp. 17-52. ISSN 1945-7669

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This paper investigates pricing decisions and network choices in two-sided markets with network externalities. Consumers are heterogeneous in how much they value the externality. Imposing restrictions on the extent of coordination failure among consumers generates clear qualitative conclusions about equilibrium market configurations. Multiple asymmetric networks can coexist in equilibrium, both in the case of a monopolist network provider and in the case of competing providers. These equilibria have the property that one network is cheaper and larger on one side, while the other network is cheaper and larger on the other side. Product differentiation is endogenized by consumers' network choices.

Item Type: Article
Additional Information: DOI: 10.1257/mic.1.1.17
Uncontrolled Keywords: D42; D43; D85; L12; L13; L14
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences
Faculty of Social Sciences > Economics, Department of
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 15 Apr 2019 08:51
Last Modified: 18 Aug 2022 10:59

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