Networks, Network Externalities and Market Segmentation

نویسندگان

  • A. Banerji
  • Bhaskar Dutta
چکیده

This paper models interaction between groups of agents by means of a graph where each node represents a group of agents and an arc represents bilateral interaction. It departs from the standard KatzShapiro framework by assuming that network benefits are restricted only amongst groups of linked agents. It shows that even if rival firms engage in Bertrand competition, this form of network externalities permits strong market segmentation in which firms divide up the market and earn positive profits. JEL Classification Numbers: D7

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تاریخ انتشار 2004