Network Economics
by Taylor Ge
1. Network Externaliries
1.1. Externalities arise when one market participant affects others without compensation being paid.
1.2. Share many properties with real networks such as communications and transportation networks.
2. Negative Feedback
2.1. The strong get weaker
2.2. The weak get stronger
3. Generic Strategies in Network
3.1. The tradeoff between performance and compatibility as reflected in the choice between revolution and evolution. Controlled migration, open Migration.
3.2. The trade-off between openness and control, Which are performance control, discontinuity
4. Telephone Networks and Interconnections
4.1. Color Television
4.2. High Definition Television
5. Positive Feedback
5.1. virtuous cycle
5.2. Vicious Cycle. the virtuous cycle of growth can easily change to vicious cycle of collapse.
6. Economies of scale
6.1. Demand Side, the old industrial economy was driven by economies of scale.
6.2. Supply Side, the new information economy is driven by the economics of networks.
7. Collective Switching Cost
7.1. Moving to the Internet presents substantial collective switching costs, and less incremental value.
7.2. The key is to anticipate the next generation of technology and co-opt it.
