Garcia, Filomena; Vergari, Cecilia - 2008
the overall product
differentiation. Under weak network effect, i.e., when the weight of the network effect
relative to … allows firms to manipulate the overall product differentiation. Namely, when
consumers’ valuation of the network is not high … the
price game, given by
p∗A = 0,
p∗B = α(1−τ),
where D∗A = 0 and D∗B = 1.
As in the classical model of vertical product …