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- Title
Managing Consumer Referrals on a Chain Network.
- Authors
Arbatskaya, Maria; Konishi, Hideo
- Abstract
We consider a monopoly that sets a price and differentiated referral fees to spread product information along a simple consumer communication network (a chain). The profit-maximizing solution involves standard monopoly pricing and referral fees that provide consumers with strictly positive referral incentives. Effective price discrimination among consumers based on their positions in the chain occurs both in the case of differentiated referral fees and in the case of uniform referral fees.
- Subjects
REFERRAL centers (Information services); PRICE discrimination; PRICING; MONETARY incentives; INFORMATION networks; INFORMATION services
- Publication
Review of Network Economics, 2014, Vol 13, Issue 1, p69
- ISSN
1446-9022
- Publication type
Article
- DOI
10.1515/rne-2014-0002