We consider an incumbent firm and a more efficient entrant, both offering a network good to several asymmetric buyers. The incumbent disposes of an installed base, while the entrant has a network of size zero at the outset, and needs to attract a critical mass of buyers to operate. We analyze different price schemes (uniform pricing, implicit price discrimination - or rebates, explicit price discrimination) and show that the schemes which - for given market structure - induce a higher level of welfare are also those under which the incumbent is more likely to exclude the rival.

Exclusionary Pricing and Rebates When Scale Matters / Liliane, Karlinger; Massimo, Motta. - 6258:(2007).

Exclusionary Pricing and Rebates When Scale Matters

Liliane Karlinger;
2007

Abstract

We consider an incumbent firm and a more efficient entrant, both offering a network good to several asymmetric buyers. The incumbent disposes of an installed base, while the entrant has a network of size zero at the outset, and needs to attract a critical mass of buyers to operate. We analyze different price schemes (uniform pricing, implicit price discrimination - or rebates, explicit price discrimination) and show that the schemes which - for given market structure - induce a higher level of welfare are also those under which the incumbent is more likely to exclude the rival.
Exclusionary Pricing and Rebates When Scale Matters / Liliane, Karlinger; Massimo, Motta. - 6258:(2007).
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11385/10030
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