Abstract
We consider optimal dynamic pricing under a network externality. We construct the demand dynamic of the network good from the aggregate best response dynamic of agents who have different adoption costs. When the distribution of adoption costs is convex, expansion of potential market inevitably enlarges long-run demand.
| Original language | English |
|---|---|
| Pages (from-to) | 2768-2775 |
| Number of pages | 8 |
| Journal | Economics Bulletin |
| Volume | 35 |
| Issue number | 4 |
| Publication status | Published - 2015 |
| Externally published | Yes |
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)