The economics of network industries


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Janice Hauge and David Sappington

We find that deregulation and the strength of competition in network industries have removed justifications for structural separation as a remedy. Also, we argue that that deregulation and competition have effectively eliminated support for application of the essential facilities doctrine. Antitrust policy in network industries should be guided by considerations of dynamic efficiency.

Daniel Sokol eds.

Yoo, Christopher S. Faculty Scholarship at Penn Law. Advanced Search. DiMaggio, P.


  1. Communities of Difference: Culture, Language, Technology.
  2. Informaiton?
  3. Effective logic computation.

Dumont B. Economides, N. Evans, Philip, and Thomas S.

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Wurster Blown to Bits. Hawley A.

Katz M. Liebowitz S. Quinn J.

Space: The Next Trillion Dollar Industry

One fax machine is useless; two connects you and a friend; a broad network of fax machines connects you to the world. More and more value is created for you as more and more people own fax machines.

Competition in Network Industries : Where and How to Introduce It

At some point the market reaches a critical mass tipping point. The potential for network effects in healthcare and care management is huge. Physicians would value other physicians and patients being on the same network so that they could share data and coordinate patient care. Patients would like to communicate with their physicians and to coordinate care for themselves and their loved ones.

Review of Network Economics

There are several types of switching costs that affect the degree of lock in. Shapiro and Varian provide a nice classification of the various lock-ins. Contracts : Users are sometimes locked into contracts for service, supplying parts, and buying spare parts…. Training and learning : Consumers are trained to use products operating on a specific standard.

Switching costs would include learning and training people, as well as lost productivity resulting from adopting a new system.

The Economics of Network Industries

Data conversion : Each piece of software generates files that are saved using a particular digital format. Once a new software is introduced a conversion software may be needed in order to be able to use it.


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  • Notice that the resulting switching cost increases over time as the collection of data may grow over time. Search cost : One reason why people do not switch very often is that they would like to avoid the cost of searching and shopping for new products.

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    Lock-in tactics have become a staple of healthcare business and IT strategy. Lock in and switching costs are not inherently evil, even though as consumers we might not like them. The problem in health IT today is that much of the lock-in and switching costs derives from the lack of complementarity, compatibility and standards characteristic 1.

    The economics of network industries The economics of network industries
    The economics of network industries The economics of network industries
    The economics of network industries The economics of network industries
    The economics of network industries The economics of network industries
    The economics of network industries The economics of network industries
    The economics of network industries The economics of network industries
    The economics of network industries The economics of network industries

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