Munich Personal RePEc Archive

Prices in Networks

Tan, Hi-Lin (2006): Prices in Networks.

[img]
Preview
PDF
MPRA_paper_62984.pdf

Download (198kB) | Preview

Abstract

When there is strategic complementarity of consumption between neighbors in a social network, we find that certain consumers may have a bigger impact than other consumers on the market demand and therefore the equilibrium price. The influence that a particular consumer has on the market demand depends on the network structure and the consumer’s location in the network. This analysis may, for example, shed light on the segment of consumers that should be the target of selective advertisements or promotions.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.