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Long-Term Competition for Product Awareness with Learning from Friends

Author

Listed:
  • Qiang Gong

    (Zhongnan University of Economics and Law [China])

  • Yujing Xu

    (Shenzhen Univerisity [Shenzhen])

  • Huanxing Yang

    (OSU - The Ohio State University [Columbus])

Abstract

We study a dynamic model of price competition with differentiated products in which new generations of consumers acquire information about available products from their friends of previous generations. The social network, which links consumers across generations, affects the evolution of consumers' awareness of products and firms' long-term (steady-state) market shares. Focusing on steady-state equilibria, we examine how the structure of the social network—including connectivity and homophily—influences market shares, pricing, and welfare.

Suggested Citation

  • Qiang Gong & Yujing Xu & Huanxing Yang, 2024. "Long-Term Competition for Product Awareness with Learning from Friends," Post-Print hal-04625204, HAL.
    • Handle: RePEc:hal:journl:hal-04625204
    Note: View the original document on HAL open archive server: https://audencia.hal.science/hal-04625204
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    References listed on IDEAS

    as
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    Keywords

    Learning from friends; Social network; Price competition; Market Shares; Differentiated products;
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