A Note on Expanding Networks and Monopoly Pricing
Author(s) -
Jean J. Gabszewicz,
Filomena Garcia
Publication year - 2006
Publication title -
ssrn electronic journal
Language(s) - English
Resource type - Journals
ISSN - 1556-5068
DOI - 10.2139/ssrn.886293
Subject(s) - monopoly , economics , business , industrial organization , microeconomics
We obtain explicitly the optimal path of prices for a monopolist operating in a network industry during a finite number of periods. We describe this optimal path as a function of network intensity and horizon length and show that the prices are increasing in time and that, for very low network intensity, or very high horizon length, the monopolist will offer the good at zero price in the initial period.
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