Journal article
Network effects, market structure and industry performance
Journal of economic theory, Vol.146(6), pp.2389-2419
11/01/2011
DOI: 10.1016/j.jet.2011.10.006
Abstract
This paper analyzes oligopolistic markets with network externalities. Exploiting a minimal complementarity structure on the model primitives that allows for pure network goods, we prove existence of non-trivial fulfilled-expectations equilibrium. We formalize the concept of industry viability, investigate its determinants, and show that it improves with more firms in the market and/or by technological progress. These results enlighten some well-known conclusions from case studies in the management strategy literature. We also characterize the effects of market structure on industry performance, which depart substantially from ordinary markets. The approach relies on lattice-theoretic methods, supplemented with basic insights from nonsmooth analysis.
Details
- Title: Subtitle
- Network effects, market structure and industry performance
- Creators
- Rabah Amir - University of ArizonaNatalia Lazzati - University of Michigan–Ann Arbor
- Resource Type
- Journal article
- Publication Details
- Journal of economic theory, Vol.146(6), pp.2389-2419
- Publisher
- Elsevier Inc
- DOI
- 10.1016/j.jet.2011.10.006
- ISSN
- 0022-0531
- eISSN
- 1095-7235
- Grant note
- NET Institute
- Language
- English
- Date published
- 11/01/2011
- Academic Unit
- Economics
- Record Identifier
- 9984380459402771
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