A note on how to sell a network good
File(s)
Accepted version
Author(s)
Raposo Osorio Veiga, A
Type
Journal Article
Abstract
I consider a monopolist in an industry with positive network externalities. The firm can screen heterogeneous consumers by offering multiple products. Screening captures a greater share of consumer surplus but also segregates consumers into multiple products, thereby lowering the total network surplus. Thus, screening is socially inefficient. I show screening is never profit maximizing: the monopolist offers a single product, but at an excessive price. Thus, excessive consumer segregation is unlikely to occur in industries such as online multiplayer games, financial exchanges and messaging software.
Date Issued
2018-07-01
Date Acceptance
2017-12-10
Citation
International Journal of Industrial Organization, 2018, 59, pp.114-126
ISSN
0167-7187
Publisher
Elsevier
Start Page
114
End Page
126
Journal / Book Title
International Journal of Industrial Organization
Volume
59
Copyright Statement
© 2018 Elsevier B.V. All rights reserved. This manuscript is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Licence http://creativecommons.org/licenses/by-nc-nd/4.0/
Identifier
https://www.sciencedirect.com/science/article/pii/S0167718718300195?via%3Dihub
Subjects
1401 Economic Theory
1402 Applied Economics
1403 Econometrics
Economics
Publication Status
Published
Date Publish Online
2018-03-21