NETWORK EXTERNALITIES, DOMINANT VALUE MARGINS, AND EQUILIBRIUM UNIQUENESS*

• 成果类型: Article
• 署名作者: Choi, Jay Pil; Stefanadis, Christodoulos
• 署名单位: Michigan State University; University of Piraeus
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12587
• 发表日期: 2022
• 页码: 1805-1827
• 关键词: naked exclusion; COMPETITION; MARKETS; compatibility; COORDINATION; INNOVATION

摘要

We examine tippy network markets that accommodate price discrimination. The analysis shows that when a mild equilibrium refinement, the monotonicity criterion, is adopted, network competition may have a unique subgame-perfect equilibrium regarding the winner's identity; the prevailing brand may be fully determined by its product features. We bring out the concept of the dominant value margin, which is a metric of the effectiveness of divide-and-conquer strategies. The supplier with the larger dominant value margin may always sell to all customers in equilibrium. Such a market outcome is not necessarily socially efficient.