Selling to customers with both Veblen and network effects

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• 作者：Xiaofang Wang^a ; ^{xiaofang_wang@ruc.edu.cn} ; Tong Wang^b ; ^{wangt6.16@sem.tsinghua.edu.cn} ; Guoming Lai^c ; ^{guoming.lai@mccombs.utexas.edu}
• 关键词：Veblen effect ; Network effect ; Marketing ; Production
• 刊名：Operations Research Letters
• 出版年：2017
• 出版时间：January 2017
• 年：2017
• 卷：45
• 期：1
• 页码：25-29
• 全文大小：532 K
• 卷排序：45

文摘

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.