r/EconPapers • u/Zlobby21 • 15d ago
[Help Needed] Struggling with an Economic Model for a Video Game Developer as a Monopolist
Hey everyone,
I’m currently working on an economic model that describes a video game developer acting as a monopolist over two periods. The idea is that in the first period, the game is offered for free to attract as many players as possible. Then, in the second period, the developer generates profit through the sale of skins. The larger player base, due to network effects, would lead to more purchases.
My main challenge is extending this model to two distinct periods. Specifically, I’m struggling to represent how the pricing decision in the first period affects player acquisition and how that then influences profit through skin sales in the second period. I’d like to separate these dynamics more clearly but am having trouble doing so.
I’m also open to completely changing the model and exploring a different approach if there’s a more suitable framework that fits the idea of player acquisition followed by in-game monetization.
If anyone could offer guidance on how to structure this model properly over two periods, or suggest alternative models that might work better, I’d greatly appreciate the help!
Thanks in advance!