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dc.contributor.authorSavorelli, Luca
dc.contributor.authorSeifert, Jacob
dc.identifier.citationSavorelli , L & Seifert , J 2017 ' Spatial competition and social welfare in the presence of non-monotonic network effects ' School of Economics and Finance Discussion Paper , no. 1615 , University of St Andrews , St Andrews .en
dc.identifier.otherPURE: 248665625
dc.identifier.otherPURE UUID: 43cabd89-3325-42be-bff0-3f6212a4285f
dc.description.abstractWe study a spatial duopoly and extend the literature by giving joint consideration to non-monotonic network effects and endogenous firm location decisions. We show that the presence of network effects (capturing, for example, in-store rather than online sales) improves welfare whenever the total market size is not too large. This effect is lost if network effects are specified in a monotonic fashion, in which case isolating consumers from one another always reduces welfare. We also provide a new rationale for a duopoly to be welfare-preferred to monopoly: in large markets, splitting demand between two firms can reduce utility losses due to crowding.
dc.publisherUniversity of St Andrews
dc.relation.ispartofseriesSchool of Economics and Finance Discussion Paperen
dc.rightsCopyright (c)2017, the authorsen
dc.subjectProduct differentiationen
dc.subjectNetwork effectsen
dc.subjectHB Economic Theoryen
dc.titleSpatial competition and social welfare in the presence of non-monotonic network effectsen
dc.typeWorking or discussion paperen
dc.description.versionPublisher PDFen
dc.contributor.institutionUniversity of St Andrews. School of Economics and Financeen

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