讲座：Duopoly Competition with Network Eﬀects in Discrete Choice Models
题 目：Duopoly Competition with Network Eﬀects in Discrete Choice Models
讲座嘉宾：Ningyuan Chen Assistant Professor
Department of Industrial Engineering and Decision Analytics
the Hong Kong University of Science and Technology
地 点：上海交通大学徐汇校区 安泰经济与管理学院 A303室
We consider two ﬁrms that sell substitutable products to a market of network-connected customers. The ﬁrms compete for the customers’ purchasing decisions (choice probabilities) based on the multinomial logit (MNL) model. We characterize possible Nash equilibria for homogeneous network interactions and identical ﬁrms. Interestingly, the resulting (stable or unstable) market equilibrium is never symmetric even if the ﬁrms are ex ante symmetric when the product quality is low and the network effects are neither too weak nor too strong. We extend these results along two directions. First, when the products have heterogeneous qualities, we establish that the ﬁrm selling inferior product can still retain market dominance due to the strong network effects. Nevertheless, when the quality difference is sufﬁciently large, the quality superior ﬁrm can secure its dominating position. Second, when the network consists of two communities, we show that market segmentation can arise: one product is dominating in one community, while the other product is popular in the other community.
Dr. Ningyuan Chen is currently an assistant professor at the Department of Industrial Engineering and Decision Analytics of the Hong Kong University of Science and Technology. He received his Ph.D. from the Department of Industrial Engineering and Operations Research at Columbia University. He was a postdoctoral associate at Yale School of Management from 2015 to 2016. His research interest includes dynamic pricing, market microstructure, applied probability and networks.