In many industries, firms reward their customers for making referrals. We analyze the optimal policy mix of price, advertising intensity, and referral fee for a monopoly when buyers choose to what extent to refer other consumers to the firm. We find that the firm uses its referral fee, but not...

Jun and Kim (2008) consider the optimal pricing and referral strategy of a monopoly that uses a consumer communication network to spread product information. They show that for any finite referral chain, the optimal policy involves a referral fee that provides strictly positive referral...

This study analyzes a monopolistic seller’s optimal differential pricing problem with strategic consumers connected in social networks. The consumers who purchase in the later period can get positive externality from their friends who purchased in the early period but have to bear a utility...

One of the most relevant and exciting issues in the latest decades in economics had been the asymmetric information and uncertainty, and their effects on market processes and efficiency. Some studies show that markets where information problems or/and uncertainty arise tend to be "networked",...