Autori
Motta, Massimo
KARLINGER, Liliane

Titolo
Exclusionary Pricing and Rebates When Scale Matters
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 2007 - Fascicolo: 30 - Pagina iniziale: 1 - Pagina finale: 42

We consider an incumbent firm and a more effcient entrant, both offering a network good to several asymmetric buyers. The incumbent disposes of an installed base, while the entrant has a network of size zero at the outset, and needs to attract a critical mass of buyers to operate. We analyze different price schemes (uniform pricing, implicit price discrimination - or rebates, explicit price discrimination) and show that the schemes which - for given market structure - induce lower equilibrium prices are also those under which the incumbent is more likely to exclude the rival.




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