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New telecommunications services : Network externalities and critical mass

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  • Allen, David
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    Abstract

    Network externalities -- the requirement that there be a group of subscribers if communications are to occur -- play a central role in the demand for new networks. And as telecommunications evolve, new networks have increasingly taken attention. In an effort to describe the demand for new networks, this paper investigates the critical mass phenomena that characterize network externalities. The experience to date with the Minitel information service in France serves as an informal empirical check on conclusions. With this base, the paper then draws implications for the domain appropriate to regulation and for universal service pricing under liberalization. It concludes with a speculation about the role of mixed economy, illustrated by the construction of Japanese universal service.

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    Bibliographic Info

    Article provided by Elsevier in its journal Telecommunications Policy.

    Volume (Year): 12 (1988)
    Issue (Month): 3 (September)
    Pages: 257-271

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    Handle: RePEc:eee:telpol:v:12:y:1988:i:3:p:257-271

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    Cited by:
    1. Zhang, Marina Y. & Dodgson, Mark, 2007. ""A roasted duck can still fly away": A case study of technology, nationality, culture and the rapid and early internationalization of the firm," Journal of World Business, Elsevier, vol. 42(3), pages 336-349, September.
    2. Sangin Park, 2004. "Strategic Maneuvering and Standardization: Critical Advantage or Critical Mass?," Econometric Society 2004 Far Eastern Meetings 596, Econometric Society.
    3. Lim, Byeong-Lak & Choi, Munkee & Park, Myeong-Cheol, 2003. "The late take-off phenomenon in the diffusion of telecommunication services: network effect and the critical mass," Information Economics and Policy, Elsevier, vol. 15(4), pages 537-557, December.

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