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Stefano Colombo
''Network externalities and differentiation in an entry model''
( 2011, Vol. 31 No.1 )
In a market characterized by network externalities, we consider a situation in which an established incumbent faces a new entrant: the differentiation degree chosen by the entrant increases with the network externalities, while the price set by the incumbent initially increases with the network externalities but eventually it decreases with the network externalities.
Keywords: Network externalities, differentiation, entrance
JEL: D4 - Market Structure and Pricing: General
L1 - Market Structure, Firm Strategy, and Market Performance: General
Manuscript Received : Nov 23 2010 Manuscript Accepted : Jan 04 2011

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