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on Network Economics |
| By: | Steffen Hoernig (School of Economics, Universidade Nova de Lisboa) |
| Abstract: | We consider some two dynamic models of entry in mobile telephony, with and without strategic pricing, and taking into account market penetration at entry, locked-in consumers and tariff-mediated network externalities. We show that on/off-net differentials may reduce the possibility of entry if incumbents are large, while they have no long-run effects if there are no locked-in consumers, or reduce the difference in subscriber numbers in their presence. Asymmetric fixed-to-mobile or mobile-to-mobile termination rates increase (decrease) market share and profit of the network with the higher (lower) rate. While the fixed-to-mobile waterbed effect is not full at the network level, it will be full in the aggregate. |
| Keywords: | Mobile Telephony, Entry, Penetration, Mobile termination rates |
| JEL: | L13 L51 L96 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0838&r=net |
| By: | Kris De Jaegher |
| Abstract: | As shown by Rubinstein (1989, AER), in the two-player electronic mail game, players are better off if the extent to which they can check each other’s information, check each other’s information about each other’s information, etc., is limited. This paper investigates to what extent this result extends to the multi-player electronic mail game. It is shown that, contrary to the two-player game, the multi-player game has a plethora of equilibria. If players play inefficient equilibria where they require a specific communication network to be established in order to achieve collective action, then Rubinstein’s results extend. However, contrary to the two-player game, the multi-player game also has equilibria where players find many alternative communication networks sufficient to undertake collective action. If players play such equilibria, then contrary to what is the case in the two-player electronic mail game they can become better off with more information. |
| Keywords: | Multi-Player Electronic Mail Game, Collective Action, Communication Networks. |
| JEL: | D82 D85 D71 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0831&r=net |
| By: | Lapo Filistrucchi (Department of Economics, CentEr & TILEC, Tilburg University) |
| Abstract: | I discuss the design and implementation of a SSNIP test in order to identify the relevant market in a media market. I argue that in such a two-sided market the traditional SSNIP test cannot be applied as it is usually conceived but rather should be modified in order to take into account indirect network externalities. I discuss the issues of which price the hypothetical monopolist should be thought of as raising, of whether we should look at profits changes on only one side or on both sides of the market and of which feedback among the two sides of the market we should take into account. I then derive the relevant formulas for Critical Loss Analysis. These look much uglier than in a single-sided market but in fact they are easy to calculate as they are still expressed in terms of elasticities and of current observed markups, prices and quantities. Data requirements are however higher as one needs to estimate the matrixes of the own and cross price elasticities of demand on the two-sides of the market and the matrixes of the network effects. The paper fills a gap in the economic literature, so much more as market definition in media markets is at the centre of many recent competition policy and regulation cases around the world. |
| Keywords: | two-sided markets, SSNIP test, Hypothetical Monopolist test, critical loss analysis, critical elasticity analysis, market definition, media |
| JEL: | L40 L50 K20 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0834&r=net |
| By: | Gaudeul, Alexia; Mathieu, Laurence; Peroni, Chiara |
| Abstract: | Blogs differ from other media in that authors are usually not remunerated and inscribe themselves in communities of similarly minded individuals. Bloggers value reciprocal attention, interaction with other bloggers and information from reading other blogs; they value being read but also writing itself, irrespective of an audience. A novel dataset from a major blogging community, LiveJournal, is used to verify predictions from a model of social networking. Content production and blogging activity are found to be related to the size and degree of asymmetry of the relational networks in which bloggers are inscribed. |
| Keywords: | Blog; Internet; Media; Community; Social Network; Reciprocity; Livejournal; Web 2.0 |
| JEL: | L82 Z13 D85 |
| Date: | 2008–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11278&r=net |