General Network Effects and Welfare

(In)direct network effects arise frequently in economic models but, for reasons of analytical tractability, are often assumed to be linear. Here, we examine the general non-linear case with two platforms. We establish the conditions characterising equilibria and show that welfare changes can be related in a simple, intuitive way to the degree of diminishing returns of the network effects function.

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Year of publication:	2009-04-07
Authors:	Pollock, R.
Institutions:	Faculty of Economics, University of Cambridge
Subject:	Network Effects \| Indirect Network Effects \| Platforms \| Welfare

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Series:	Cambridge Working Papers in Economics.
Type of publication:	Book / Working Paper
Language:	English
Classification:	L13 - Oligopoly and Other Imperfect Markets
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005650510