Exchange-traded funds (ETFs) tracking the same index exhibit direct network effects: flows raise assets and trading activity, which improves liquidity and attracts more flows. Consequently, firms may price lower to attract flows and build liquidity, making competition inherently dynamic. Motivated by this mechanism, we develop and estimate a dynamic oligopoly model in which demand depends on prices and a firm-specific network state, and firms’ pricing decisions trade off current margins against future network growth. We implement the framework in within-index ETF markets, estimate demand and supply primitives, and find that dynamic incentives substantially discipline prices relative to a static benchmark, especially in fast-growing markets. We will use the estimated model to study regulatory counterfactual beyond the conventional fragmentation-market power tradeoff in network industries.