Year of Graduation
Pricing and Competition in Markets with Network Structure of Demand
Based on both traditional and local network effects, the paper studies pricing strategies of the firm at monopolistic and oligopolistic markets. The author introduces differences in brand power (or perceived quality) and studies its effect on the equilibrium prices and quantities. The analysis infers the network irrelevance in equilibrium prices when costs are linear. The author also concludes that the overall effect of brand power change on prices is uncertain and dependent on the social graph.