Long-term competition for product awareness with learning from friends

• 成果类型: Article
• 署名作者: Gong, Qiang; Xu, Yujing; Yang, Huanxing
• 署名单位: Zhongnan University of Economics & Law; Shenzhen University; Audencia; Shenzhen University; University System of Ohio; Ohio State University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12467
• 发表日期: 2024
• 页码: 324-355
• 关键词: word-of-mouth; COMMUNICATION; externalities; compatibility; MARKETS; sales; MODEL; base

摘要

We study a dynamic model of price competition with differentiated products in which new generations of consumers acquire information about available products from their friends of previous generations. The social network, which links consumers across generations, affects the evolution of consumers' awareness of products and firms' long-term (steady-state) market shares. Focusing on steady-state equilibria, we examine how the structure of the social network-including connectivity and homophily-influences market shares, pricing, and welfare.