Journal ArticleDOI
Critical Mass and Tariff Structure in Electronic Communications Markets
Shmuel S. Oren,Stephen A. Smith +1 more
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In this article, the authors developed an economic model that determines both the required critical mass size for startup and the ultimate expansion level of such a system and evaluated the effects of different pricing structures for the service under the assumption that users maximize benefits minus cost and a monopoly supplier maximizes profit.Abstract:
Most communication services have a demand "externality" in that the benefit to a subscriber depends upon how many of his communication partners also subscribe. This article develops an economic model that determines both the required critical mass size for startup and the ultimate expansion level of such a system. The effects of different pricing structures for the service are evaluated under the assumption that users maximize benefits minus cost and a monopoly supplier maximizes profit.read more
Citations
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Technology Adoption in the Presence of Network Externalities
Michael L. Katz,Carl Shapiro +1 more
TL;DR: In this article, the authors analyze the adoption pattern of technologies in industries where network externalities are significant and find that the pattern of adoption depends on whether technologies are sponsored by an entity that has property rights to the technology and is willing to make investments to promote it.
Journal ArticleDOI
The Economics of Networks
TL;DR: In this article, the authors analyze the salient features of networks and point out the similarities between the economic structure of network and the structure of vertically related industries, focusing on positive consumption and production externalities, commonly called network externalities.
Journal ArticleDOI
The Economics of Networks
TL;DR: In this article, the authors analyze the salient features of networks and point out the similarities between the economic structure of network and the structure of vertically related industries, focusing on positive consumption and production externalities, commonly called network externalities.
Journal ArticleDOI
The Economics Of Compatibility Standards: An Introduction To Recent Research 1
Paul A. David,Shane Greenstein +1 more
TL;DR: In this paper, the contributions that economists have made to understanding standards-setting processes and their consequences for industry structure and economic welfare are surveyed, and major trajectories along which research has been moving are described and related to both the positive and the normative issues concerning compatibility standards that remain to be studied.
References
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Journal ArticleDOI
The telephone system as a public good: static and dynamic aspects
Roland Artle,Christian Averous +1 more
TL;DR: In this article, the authors used standard concepts of equilibrium and efficiency to analyze certain properties of the telephone system and proved the existence of a self-sustaining growth process in demand.
Journal ArticleDOI
Two-part tariffs and consumption externalities
TL;DR: In this article, the authors provide explicit characterizations of those two-part tariffs which maximize profit and consumers' plus producer's surplus, and the effect of consumption externalities (as in telecommunications systems) is explored.
Journal ArticleDOI
Some aspects of optimal pricing for telecommunications
TL;DR: In this paper, a measure for the total benefits of the system was developed for these externalities and the optimal prices were obtained allowing for them and a measure of the total benefit was developed.
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