Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5128451 | Operations Research Letters | 2017 | 5 Pages |
Abstract
For the products that provide not only intrinsic value from their functions but also stylish consumption experience, there often exist both Veblen and network effects. Some customers are more likely to purchase the product if fewer customers can afford it, while others might appreciate the existence of more peers. Focusing on these products, we study the market equilibrium under rational expectations. The optimal pricing and quantity decisions reveal interesting insights about the effects of such mixed consumption externalities.
Keywords
Related Topics
Physical Sciences and Engineering
Mathematics
Discrete Mathematics and Combinatorics
Authors
Xiaofang Wang, Tong Wang, Guoming Lai,