Abstract: Strategy of second degree price discrimination is studied in the market with network externality and nonlinear demand function,through different charge according to different segment of the demand curve.Firstly,the static pricing strategy by second degree price discrimination is studied in one stage.Then,the dynamic pricing strategy by second degree price discrimination is studied in two stages under the monopoly's maximal profit.It is shown that the optimal segment of the demand curve is not affected by network externality,but the price will be improved according to the higher growth of network externality,and the price in the first stage is higher than the discounted present value of the price in the second stage.

Key words: second degree price discrimination, nonlinear demand: network externality, dynamic pricing strategy