This book introduces upper-level undergraduates, graduate students, and researchers to the latest developments in network economics, one of the fastest-growing fields in all industrial organization. Network industries include the Internet, e-mail, telephony, computer hardware and software, music and video players, and service operations in the banking, legal, and airlines industries among many others. The work offers an overview of the subject matter as well as investigations about specific industries. It conveys the essential features of how strategic interactions between firms are affected by network activity, as well as covering social interaction and its influence on consumers' choices of products and services. Virtually no calculus is used in the text, and each chapter ends with a series of exercises and selected references. The text may be used for both one- and two-semester courses.
• First textbook on the economics of network industries • Covers the Internet, e-mail, telephony, computer hardware and software, music and video players, and service operations in the banking, legal, and airlines industries • The writing is clear, the scope is wide, and the examples will engage students
1. Introduction; 2. The hardware industry; 3. The software industry; 4. Technology, advance, and standardization; 5. Telecommunication; 6. Broadcasting; 7. Markets for information; 8. Banks and money; 9. The airline industry: social interaction; 10. Other networks; Appendix A. Normal-form games; Appendix B. Extensive-form games; Appendix C. Undercut-proof equilibria.
'The Economics of Network Industries is the first textbook devoted exclusively to the analysis of markets in which the utility of consumers increases with the number of others purchasing the same (i.e. compatible) product.' Managerial and Decision Economics
'… the value of the undertaking is undisputable …'. Weltwirtschaftliches Archiv (Review of World Economics)