2007
DOI: 10.1007/s00191-007-0065-5
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Evolution of market shares with repeated purchases and heterogeneous network externalities

Abstract: We investigate how market shares change when a new, superior technology exhibiting network externalities is introduced in a market initially dominated by an old technology. This is done under the assumption that consumers are heterogeneous in their valuation of technology quality and network externalities and that goods are not (perfectly) durable and thus have to be bought repeatedly. When both technologies are unsponsored, the old technology dominates when the quality difference is small, and it disappears w… Show more

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Cited by 10 publications
(3 citation statements)
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References 15 publications
(27 reference statements)
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“…Vouchers, for instance, limit the bearer to a specific set of goods and services at a fixed reimbursement amount (Steuerle 2000; Janssen et al . 2004).…”
Section: Introductionmentioning
confidence: 99%
“…Vouchers, for instance, limit the bearer to a specific set of goods and services at a fixed reimbursement amount (Steuerle 2000; Janssen et al . 2004).…”
Section: Introductionmentioning
confidence: 99%
“…The weaknesses of such interventions in increasing uptake of health facility services have led to increased interest in and experimentation with demand-side mechanisms that place purchasing power in the hands of targeted consumers to spend on specific services at accredited facilities, thereby increasing access and encouraging quality improvement. Examples of demand-side financing mechanisms that are being explored include output-based aid (OBA) vouchers and social health insurance programmes (Gorter et al 2003; Janssen et al 2004; Borghi et al 2006; Bhatia and Gorter 2007; Lagomarsino et al 2012; Moreno-Serra and Smith 2012). …”
Section: Introductionmentioning
confidence: 99%
“…Therefore, more and more scholars pay attention to how enterprises get the best profit and gain competitive advantage from the market with network externality. The research shows that the use of network externalities through compatibility strategy enables enterprises to gain more market share (Katz and Shapiro,1985); under the network externality, enterprises can attract more consumers and make more profits through pricing strategy (Cabral and Salant,1999;Cabral,2011;Jullien,2001), and the influence of consumers' demand for products or services and the transfer of market share (Mitchell,2006;Janssen and Mendys, 2007). Yi and Yang (2017) believes that in a market environment of network externalities, retailers must consider changes in market demand caused by network externalities and make corresponding decisions about these changes, such as decisions to adjust prices and order quantities, and ways to maximize profits or market share maximization in order to achieve profits.…”
Section: Literature Reviewmentioning
confidence: 99%