LIAAD - Other Publications

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    Negative network effects and asymmetric pure price equilibria
    ( 2021) Alberto Pinto ; Renato Araújo Soeiro ; 5682 ; 5745
    We show that in finite settings with identical firms and consumers, asymmetric pure price equilibria with positive profits exist. We consider a price competition duopoly for a homogeneous product. Demand stems from a second-stage consumption game at posted prices, with consumers' behavior impacted by negative network effects. We characterize equilibrium prices and demand. In all subgame-perfect pure price equilibria, both firms have positive profits, and in some, firms charge different prices.