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Intrinsic quality improvements and network externalities

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Jaskold Gabszewicz, Jean [UCL] Garcia, Filomena []

We analyze the optimal pricing choice of an incumbent firm that sells a good with network externalities and is threatened by the entry of a higher intrinsic quality variant. In the framework of a vertical differentiation model, we find a necessary and sufficient condition under which intrinsic quality improvement occurs as a result of this competition.

Document type Article de périodique (Journal article)
Publication date 2007
Language Anglais
Journal information "International Journal of Economic Theory" - Vol. 3, no. 4, p. 261-278 (Décembre 2007)
Peer reviewed yes
Publisher Wiley-Blackwell Publishing Ltd. (Oxford, United Kingdom)
issn 1742-7355
Publication status Publié
Affiliations UCL - EUEN/CORE - Center for operations research and econometrics
Technical University of Lisbon - ISEG (School of Economics and Management)
Links
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Bibliographic reference Jaskold Gabszewicz, Jean ; Garcia, Filomena. Intrinsic quality improvements and network externalities. In: International Journal of Economic Theory, Vol. 3, no. 4, p. 261-278 (Décembre 2007)
Permanent URL http://hdl.handle.net/2078.1/23416