Instruct: Identify the main and secondary category of Arxiv papers based on the titles and abstracts
Query: Pricing and Referrals in Diffusion on Networks   When a new product or technology is introduced, potential consumers can learn
its quality by trying the product, at a risk, or by letting others try it and
free-riding on the information that they generate. We propose a dynamic game to
study the adoption of technologies of uncertain value, when agents are
connected by a network and a monopolist seller chooses a policy to maximize
profits. Consumers with low degree (few friends) have incentives to adopt
early, while consumers with high degree have incentives to free ride. The
seller can induce high-degree consumers to adopt early by offering referral
incentives - rewards to early adopters whose friends buy in the second period.
Referral incentives thus lead to a `double-threshold strategy' by which low and
high-degree agents adopt the product early while middle-degree agents wait. We
show that referral incentives are optimal on certain networks while
inter-temporal price discrimination (i.e., a first-period price discount) is
optimal on others, and discuss welfare implications.

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The categories of this paper are: astro-ph
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The categories of this paper are: dg-ga
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The categories of this paper are: nucl-ex
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The categories of this paper are: hep-ex
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The categories of this paper are: solv-int
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The categories of this paper are: funct-an
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The categories of this paper are: bayes-an
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The categories of this paper are: econ
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The categories of this paper are: stat
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The categories of this paper are: comp-gas
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The categories of this paper are: quant-ph
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The categories of this paper are: atom-ph
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The categories of this paper are: nlin
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The categories of this paper are: math-ph
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The categories of this paper are: supr-con
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The categories of this paper are: eess