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Network externalities, competition, and compatibility

Michael L. Katz
- 01 Jan 1985 - 
- Vol. 75, Iss: 3, pp 424-440
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This article is published in The American Economic Review.The article was published on 1985-01-01 and is currently open access. It has received 6100 citations till now. The article focuses on the topics: Network economics.

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The late take-off phenomenon in the diffusion of telecommunication services: network effect and the critical mass

TL;DR: It is found that the late take-off phenomenon resulted from the low heterogeneity of the threshold distribution for the potential adopters in a new diffusion model based on the threshold model proposed by Markus.
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Sustainability Condition of Open Innovation: Dynamic Growth of Alibaba from SME to Large Enterprise

TL;DR: Wang et al. as discussed by the authors investigated the expanded open business model feedback loop platform, the continuously strengthened open-innovation-friendly culture, and complexity, with the latter being the cost of open innovation, which was controlled by an openinnovationfriendly culture and open business models feedback loop.
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The impact of technology advancement strategies on consumers' patronage decisions

TL;DR: In this paper, a systematic framework was proposed to explore the nature of the links between technology advancement strategies and consumer technology patronage via network externalities and switching costs, based on consumer survey data from South Korea.
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Forecasting sales and product evolution: The case of the hybrid/electric car

TL;DR: In this article, the authors present a model that forecasts sales and product evolution, based on data on market and industry, which can be collected before the product is introduced, and demonstrate the method on the hybrid car market.
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Competing by Restricting Choice: The Case of Search Platforms

TL;DR: The authors developed a stylized model of online dating where agents with different outside options match based on how much they like each other, and derived the strength and direction of indirect network effects.
References
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Monopoly, quality, and regulation

TL;DR: In this paper, the authors argue that under regimes of monopoly and monopolistic competition, product characteristics (which are often endogenous variables) are not usually optimally set under the pressure of market forces, and that regulation is also beset with difficulties when price and quality are decision variables.
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Critical Mass and Tariff Structure in Electronic Communications Markets

TL;DR: 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.
Posted Content

Tax Analysis in an Oligopoly Model

TL;DR: In this article, the authors use the conjectural variations model of oligopoly to analyze the way in which the incidence of a tax depends upon the pattern of firm interaction and show that the errors that arise in excess burden calculations when incorrect assumptions on market structure are made.
Journal ArticleDOI

Tax Analysis in an Oligopoly Model

TL;DR: In this paper, the authors use the conjectural variations model of oligopoly to analyze the way in which the incidence of a tax depends on the pattern of firm interaction and show that the errors that can arise in excess burden calculations when incorrect assumptions on market structure are made.