General Network Effects and Welfare
Abstract(In)direct network effects arise frequently in economic models but, for reasons of analytical tractability, are often assumed to be linear. Here, we examine the general non-linear case with two platforms. We establish the conditions characterising equilibria and show that welfare changes can be related in a simple, intuitive way to the degree of diminishing returns of the network effects function.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0915.
Date of creation: 07 Apr 2009
Date of revision:
Contact details of provider:
Web page: http://www.econ.cam.ac.uk/index.htm
Network Effects; Indirect Network Effects; Platforms; Welfare;
Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-04-13 (All new papers)
- NEP-COM-2009-04-13 (Industrial Competition)
- NEP-IND-2009-04-13 (Industrial Organization)
- NEP-MIC-2009-04-13 (Microeconomics)
- NEP-NET-2009-04-13 (Network Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Church Jeffrey & Gandal Neil & Krause David, 2008.
"Indirect Network Effects and Adoption Externalities,"
Review of Network Economics,
De Gruyter, vol. 7(3), pages 1-22, September.
- Jeffrey Church & Neil Gandal & David Krause, 2003. "Indirect Network Effects and Adoption Externalities," Microeconomics 0301001, EconWPA.
- Church, Jeffrey & Gandal, Neil & Krause, David, 2003. "Indirect Network Effects and Adoption Externalities," CEPR Discussion Papers 3738, C.E.P.R. Discussion Papers.
- Pollock, Rufus, 2005.
"The Control of Porting in Two-Sided Markets,"
5023, University Library of Munich, Germany, revised Jun 2007.
- Caillaud, Bernard & Jullien, Bruno, 2003. " Chicken & Egg: Competition among Intermediation Service Providers," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 309-28, Summer.
- Church, Jeffrey & Gandal, Neil, 1992. "Network Effects, Software Provision, and Standardization," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 85-103, March.
- Tim Paul Thomes, 2010. "Vertically Related Markets of Collective Licensing of Differentiated Copyrights with Indirect Network Effects," Jena Economic Research Papers 2010-056, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Howard Cobb).
If references are entirely missing, you can add them using this form.