Thursday, November 21, 2019

Note on the Excess Entry Theorem in the Presence of Network Externalities

By: Tsuyoshi Toshimitsu (School of Economics, Kwansei Gakuin University)
Abstract: We reconsider the excess entry theorem in the presence of network externalities under Cournot oligopoly. We demonstrate that if the strength of a network externality is larger (smaller) than a half, the number of firms under free entry is socially too small (too large), based on the second-best criteria.

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