Network effects, market structure and industry performance

• 成果类型: Article
• 署名作者: Amir, Rabah; Lazzati, Natalia
• 署名单位: University of Arizona; University of Michigan System; University of Michigan
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2011.10.006
• 发表日期: 2011
• 页码: 2389-2419
• 关键词: Network goods; Demand-side externalities; Industry viability; Industry start up; supermodularity

摘要

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. (C) 2011 Elsevier Inc. All rights reserved.