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Article
Optimal Monopoly Price Paths with Expanding Networks
Review of Network Economics (2007)
  • Jean Gabszewicz, UniversitĂ© Catholique de Louvain
  • Filomena Garcia, Technical University of Lisbon
Abstract
In this paper, we survey the literature on optimal pricing of a monopolist operating on a network industry. We also describe explicitly the optimal path of prices for a monopolist facing an expanding demand due to the presence of network effects. The optimal path of prices appears as a function of the network effect intensity and horizon length. Prices are increasing over time and for very low network effect intensity, or very high horizon length, the monopolist will offer the good at zero price in the initial period.
Publication Date
March 1, 2007
Citation Information
Jean Gabszewicz and Filomena Garcia. "Optimal Monopoly Price Paths with Expanding Networks" Review of Network Economics Vol. 6 Iss. 1 (2007)
Available at: http://works.bepress.com/jean_gabszewicz/3/