Network externalities, lexicographic demand shifts, and marginal cost dumping

IR

Abstract

type:text

In many cases, dumping involves a massive demand shift from domestic products to competing foreign products that are newly introduced to the domestic market. This study presents a new way of modelling such a demand shift relating to network externalities and demonstrates that the monopolistic supplier of a new product may sell at a price below the marginal cost. This result provides a new explanation for what may be called marginal cost dumping.

Special issue in honor of Prpfessor Michihiro Ohyama

Journal

  • Keio economic studies

    Keio economic studies 42 (1/2), 115-130, 2005

    Keio Economic Society, Keio University

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