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A note on how to sell a network good

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Title: A note on how to sell a network good
Authors: Raposo Osorio Veiga, A
Item 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.
Issue Date: 1-Jul-2018
Date of Acceptance: 10-Dec-2017
URI: http://hdl.handle.net/10044/1/75950
DOI: 10.1016/j.ijindorg.2017.12.009
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/
Keywords: 1401 Economic Theory
1402 Applied Economics
1403 Econometrics
Economics
Publication Status: Published
Open Access location: https://www.sciencedirect.com/science/article/pii/S0167718718300195
Online Publication Date: 2018-03-21
Appears in Collections:Imperial College Business School