Asymmetric networks in two-sided markets

Published

Journal Article

This paper investigates pricing decisions and network choices in twosided markets with network externalities. Consumers are heterogeneous in how much they value the externality. Imposing restrictions on the extent of coordination failure among consumers generates clear qualitative conclusions about equilibrium market configurations. Multiple asymmetric networks can coexist in equilibrium, both in the case of a monopolist network provider and in the case of competing providers. These equilibria have the property that one network is cheaper and larger on one side, while the other network is cheaper and larger on the other side. Product differentiation is endogenized by consumers' network choices.

Full Text

Duke Authors

Cited Authors

  • Ambrus, A; Argenziano, R

Published Date

  • February 1, 2009

Published In

Volume / Issue

  • 1 / 1

Start / End Page

  • 17 - 52

Electronic International Standard Serial Number (EISSN)

  • 1945-7685

International Standard Serial Number (ISSN)

  • 1945-7669

Digital Object Identifier (DOI)

  • 10.1257/mic.1.1.17

Citation Source

  • Scopus