Economies of Network Industries

by Gottinger; Hans-Werner

• ISBN13: 9780415277402
• ISBN10: 041527740X
• Edition: 1st
• Format: Hardcover
• Copyright: 2003-05-23
• Publisher: Routledge

Summary

Hans Gottingerexamines different types of network industries such as railways, telecommunications and new media, and the economics thereof. An accent on history is something that makes this book stand apart from others in the area. The author's accessible writing style and knowledgeable research should make the book recommended reading for all those interested in industrial, innovation and micro policy economics.

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