Market size effects on long-run demand of a network good

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We consider optimal dynamic pricing under a network externality. We construct the demand dynamic of the network good from the aggregate best response dynamic of agents who have different adoption costs. When the distribution of adoption costs is convex, expansion of potential market inevitably enlarges long-run demand.

Original languageEnglish
Pages (from-to)2768-2775
Number of pages8
JournalEconomics Bulletin
Issue number4
Publication statusPublished - 2015


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