Networks, Noise and Navigation: Sustaining Metcalfe’s Law through Technological Innovation

The paper examines the relationship between network externalities and the value ofthe World-Wide Web. It is shown that value depends on two offsetting effects. First,as the Web grows in size, so existing users gain from the additional content providedby new users. This is the standard concept of a network externality. However, at thesame time, a large and expanding network can suffer from congestion. Congestioncan manifest itself in the time taken to download information from the Web. But anarguably more important problem is navigating the very large number of webpages onoffer and to identify the particular page containing information that is of interest.These navigation issues have serious implications for the continued growth of theWeb, as described by Metcalfe’s Law.economics of technology ;

Waves in consumption with interdependence among consumers

International audienc

International Standards and Trade: A Review of the Empirical Literature

While there is a large literature on the economic theory of international standards, and their presumed effects, we know much less about how international standards work in practice. This paper reviews the body of empirical work that has investigated the specific question: How international standards impact on international trade? Do they help or hinder trade? The work reviewed ranges from econometric studies using a variety of measures of standards derived from e.g. the Perinorm database, diffusion of ISO9000, regional agreements, mutual recognition agreements and harmonisation, to surveys of exporting firms. A mapping of the findings from econometric models shows that there is often, but not always, a positive relationship between international standards and exports or imports, which is in line with the widely held view that international standards are supportive of trade. For national (i.e. country-specific) standards studies find positive as well as negative effects on trade and thus provide only qualified support for the commonly held view that national standards create barriers to trade. Overall, the literature reviewed does not provide a single answer to the question of trade effects, and the explanation for this appears to have to do with how the multiple economic effects of standards interact. The paper summarises some of the existing empirical evidence for some of these effects, which include network externalities, variety, knowledge, quality and trust, and which merit further research in order to understand when standards help trade, and when not.international trade, imports, trade barriers, standards, technical regulations, mutual recognition agreement, ISO, International Organisation for Standardisation, empirical, WTO SPS Agreement, MRAs, mutual recognition, International Electrotechnical Commission, IEC, International Telecommunication Union, ITU, international standards, harmonisation agreement, exports, harmonisation, econometric model, trade effect, TBT Agreement, Perinorm

special issue: The demand for distinction and the evolution of the prestige car

This paper studies the demand for a distinction good - the prestige car - and examines how this demand for distinction influences the evolution of the product. We focus on two very different sorts of distinction car: the Rolls Royce and the Ferrari. These two examples help us to articulate two polar approaches to the demand for distinction: distinction through antiquity and distinction through novelty. The paper sets out a model of the demand for distinction, and uses it to describe two trajectories along which the prestige car - and the demand for it - may evolve.Consumption - Demand - Design - Distinction - Product evolution

Network effects, network structure and consumer interaction in mobile telecommunications in Europe and Asia

This paper estimates the importance of (tariff-mediated) network effects and the impact of a consumer's social network on her choice of mobile phone provider. The study uses network data obtained from surveys of students in several European and Asian countries. We use the Quadratic Assignment Procedure, a non-parametric permutation test, to adjust for the particular error structure of network data. We find that respondents strongly coordinate their choice of mobile phone providers, but only if their provider induces network effects. This suggests that this coordination depends on network effects rather than on information contagion or pressure to conform to the social environment.Network effects Social networks Mobile telecommunications QAP

Waves in consumption with interdependence among consumers

In this paper we model the development of consumption when there are interactions between consumers. The consumer recognizes three reference groups: peer, distinction, and aspiration. The interplay of aspiration and distinction can lead to `waves' in consumption; for example, the avant-garde consumption of up-market pioneers is copied by other types of consumer. As the latter aspire to emulate the former, the former seek distinction by varying their consumption. A consumption activity may start up market, then gradually descend the social spectrum. More complex patterns with continuing cycles in consumption can also be found.

THE IMPACT OF DEFENCE INTEGRATORS AND STANDARDS ON VERTICAL AND HORIZONTAL INNOVATION IN THE DEFENCE INDUSTRY

This paper analyses the extent and character of product innovation in defence technologies where there are strong network effects, but where there is not a generally accepted system of open standards. Specifically, we examine the implications for innovation from the development of network-centric defence agencies accompanied by the creation of system integrators in the defence industry. The results show that although these developments are expected to have a number of positive impacts, such as enhanced security and gate-keeping of the relevant technologies, they are also likely to have an adverse effect on the available variety of new defence products.Defence industry, Innovation, Integrators, Network, Standards,