Publication Type

Working Paper

Version

publishedVersion

Publication Date

3-2005

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.

Keywords

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

Discipline

Behavioral Economics

Research Areas

Applied Microeconomics

Volume

05-2005

First Page

1

Last Page

22

Publisher

SMU Economics and Statistics Working Paper Series, No. 05-2005

City or Country

Singapore

Copyright Owner and License

Authors

Comments

Published in Journal of Economics, 2005, 84 (1), 49-69. https://doi.org/10.1007/s00712-004-0100-z

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