The Economics of Networks: Outline

The Economics of Networks

by Nicholas Economides

October 1996, International Journal of Industrial Organization

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Abstract
Section 1: Introduction
Section 2: Classification of Networks
Section 3: Network Externalities
Section 3.1: Sources of Network Externalities
Section 3.2: The "Macro" Approach
Section 3.2.1: Perfect Competition
Section 3.2.2: Monopoly
Section 3.2.3: Oligopoly and Monopolistic Competition Under Compatibility
Section 3.2.4: Oligopoly Under Incompatibility
Section 3.2.5: Coordination to Technical Standards with Asymmetric Technologies
Section 3.3: The "Micro" Approach
Section 3.3.1: Mix and Match: Compatibility vs. Incompatibility
Section 3.3.2: Changes in the Number of Varieties as a Result of Compatibility Decisions
Section 3.3.3: Quality Coordination in Mix-and-Match
Section 4: Network Externalities and Industry Structure
Section 4.1: Invitations to Enter
Section 4.2: Interconnection or Foreclosure by a Local Monopolist
Section 5: Sequential Games
Section 6: Markets for Adapters and Add-ons
Section 7: Concluding Remarks
References

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