Table Of Contents:

List of figures xiii

List of tables xiv
Preface xv

Network economics 1(15)

Introduction 1(1)

Networks and network industries 1(4)

High-risk investments and sunk costs 5(1)

Economies of scale 6(1)

Network externalities 7(3)

Complementarity, compatibility, and standardization 10(2)

The rationale of strategic alliances 12(1)

Setting standards 13(1)

References 14(2)

Network size and value 16(5)

Introduction 16(1)

Perspectives on network externalities 17(1)

Hypotheses on network externalities 17(1)

Technology adoption and network industries 18(1)

References 19(2)

Technology adoption in networks 21(16)

Introduction 21(1)

Examples: present and past 21(1)

The simple mechanism of technology adoption 22(2)

Compatibility through bridging technology 24(3)

Resolving empirical puzzles 27(1)

Review of related work 28(2)

A coordination game 30(2)

Antitrust policy 32(1)

Strategic pricing 33(2)

Conclusions 35(1)

References 36(1)

Technological racing in network industries 37(19)

Introduction 37(2)

State of research 39(3)

A model framework for a simple stochastic race 42(3)

Statistical measurements of industrial racing patterns 45(6)

Discussion 51(4)

References 55(1)

Networks and competition 56(21)

Introduction 56(2)

Issues in the telecommunications industry 58(5)

Evaluating complex network competition cases 63(8)

Leveraging market power 71(2)

Raising rivals' costs 73(1)

Increasing barriers to entry and foreclosure 74(1)

References 75(2)

Strategic alliances, mergers, and acquisitions 77(24)

Introduction 77(2)

Integration 79(1)

Screening of market power 80(1)

Exclusion of access to alliance 81(5)

Exclusionary strategies in vertical alliances 86(4)

Tying in strategic alliances 90(2)

Grantback provisions and cross licensing 92(1)

Vertical integration 93(4)

International conflicts 97(1)

Conclusions 98(1)

References 99(2)

Standards, compatibility, market share, competition, and quality 101(26)

Introduction 101(1)

Networks and industrial organization: a review 102(4)

The model 106(1)

Competition and market share 107(1)

Social welfare 108(1)

Assessment of profits 109(2)

Network externality and choice of product quality 111(2)

Modelling product quality 113(2)

Some equilibrium results 115(1)

Quality comparisons 116(2)

Cost of quality 118(1)

Assessing social welfare 119(2)

Free entry and consumer expectations 121(3)

Conclusions 124(1)

References 125(2)

Network economies for the Internet: conceptual models 127(24)

Introduction 127(1)

Design goals 128(1)

The rationale of economic models in networking 129(1)

Internet resources 130(6)

Modelling approach 136(4)

Network economy 140(8)

Conclusions 148(1)

References 149(2)

Network economies for the Internet: application models 151(16)

Introduction 151(1)

Two examples 152(3)

Results from the network economy 155(1)

Price equilibrium 156(2)

Agent routing and admission 158(2)

The server economy 160(3)

Transaction routing 163(1)

Conclusions 164(1)

Appendix: proofs of Pareto optimal allocations 165(1)

References 165(2)

Macroeconomics of network industries 167(15)

Introduction 167(1)

Economic transformation 168(2)

Assessing the transformation 170(3)

The productivity paradox 173(3)

The global network economy 176(2)

Intangible assets 178(1)

Information markets 179(1)

Conclusions 179(1)

References 180(2)
Appendix A The Japanese telecommunications industry 182(18)
Appendix B Network size, value, and cycles 200(16)
Appendix C Quality of service parameters in queueing networks for the Internet 216(9)
Index 225