Title

Household Demand, Network Externality Effects and Intertemporal Price Discrimination

Publication Type

Journal Article

Publication Date

2005

Abstract

This paper examines the optimality of intertemporal price discrimination when network externality effects are present in the consumption of a durable good. We conduct our study in two settings. In a model with two household types, utilities are dependent on the cumulative proportion of households that have purchased the durable good. Next, in a model with a continuum of household types, we extend the analysis to the case where households consume both a durable good and a stream of non-durable goods. We show that in both settings, the presence of network externalities facilitates a sales strategy with intertemporal price discrimination. [PUBLICATION ABSTRACT]

Keywords

intertemporal price discrimination, durable good, household demand, network externality.

Discipline

Econometrics

Research Areas

Applied Microeconomics

Publication

Journal of Economics

Volume

84

Issue

1

First Page

49

Last Page

69

ISSN

0931-8658

Publisher

Springer Verlag

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

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