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Wednesday, April 07, 2021

Considering the Measure of Network Effects,

Recall our visits to the Sante Fe Institute to talk network effects, but also having a hard time establishing good measures.   Later talking the establishment of our Tremor effort.   And the ultimate difficulty measuring influence of such effects in context.  

Here an article touching on this.

Assessing the Strength of Network Effects in Social Network Platforms  by Marco Iansiti  in HBSWK

Network-specific traits, such as the degree of clustering and the prevalence of multihoming, influence the strength and competitive impact of network effects. However, network size alone is often misleading, and network effects should be examined on a case-by-case basis. ...

Author Abstract:

Network effects have risen to the forefront of platform competition discussions (e.g., the House Judiciary investigation of competition in digital markets, claiming that Facebook, for example, is entrenched due to strong network effects and high switching costs). While newer literature has developed much more sophistication in characterizing network effects, common regulatory perspective often assumes more simplistic views. ... ' 

Full paper PDF

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