The Economics of Network Industries

Oz Shy

Table of Contents:

1    Introduction
        1.1    Overview of Network Industries
        1.2    Welfare Aspects
        1.3    References and the Scientific Literature
        1.4    Notation
        1.5    Selected References

2    The Hardware Industry
        2.1    Hardware Compatibility
        2.2    The Network Externalities Approach
        2.3    The Components Approach
        2.4    Empirical Findings on Network Externalities
        2.5     Exercises
        2.6    Selected References

3    The Software Industry
        3.1    Principles of Software Production
        3.2    The Determination of Software Variety
        3.3    Software Variety Under Hardware Competition
        3.4    Software Variety and Partial Compatibility
        3.5    Software Piracy
        3.6    Software Pricing and Market Segmentation
        3.7    Empirical Findings
        3.8    Exercises
        3.9    Selected References

4    Technology Advance and Standardization
        4.1    New Technology Adopgtion: A Static Approach
        4.2    Technology Revolutions: A Dynamic Approach
        4.3    International Standardization
        4.4    Exercises
        4.5    Selected References

5    Telecommunication
        5.1    Telecommunication Services
        5.2    Telecommunication Services: A Calculus Approach
        5.3    Interconnections
        5.4    Exercises
        5.5    Selected References

6    Broadcasting
        6.1    Broadcasting and Cable Television
        6.2    Spectrum Allocation
        6.3    Digital Convergence
        6.4    Exercises
        6.5    Selected References

7    Markets for Information
        7.1    Information Reproduction
        7.2    The Economics of Libraries
        7.3    The Internet
        7.4    Pricing Information Goods
        7.5    Exercises
        7.6    Selected References

8    Banks and Money
        8.1    Switching Costs and Competition
        8.2    Automatic Teller Machines (ATMs)
        8.3    Media of Exchange as Networks
        8.4    Exercises
        8.5     Selected References

9    The Airline Industry
        9.1    Network Structures and Network Economies
        9.2    Deregulation and Entry
        9.3    Code-Sharing Agreements
        9.4    Exercises
        9.5    Selected References

10    Social Interaction
        10.1    Status-seeking vs. Conformism: A Calculus Approach
        10.2    Conformity, Vanity, and Price Competition
        10.3    The Economics of Entertainment Places
        10.4    Gifts
        10.5    Exercises
        10.6    Selected References

11    Other Networks
        11.1    Languages as a Networks
        11.2    Religous Affiliations as Networks
        11.3    Lawsuits and Lawyers
        11.4    International Time Coordination
        11.5    Who is Driving on the "Wrong" Side of the Road?
        11.6    Exercises
        11.7    Selected References


A    Normal-Form Games
        A.1    What is Game Theory?
        A.2    What is a Game?
        A.3    Equilibrium Concepts
        A.4    Best-Response Functions
        A.5    Pareto Comparisons Among Outcomes
        A.6    Exercises

B    Extensive-Form Games
        B.1    Defining Strategies and Outcomes in Extensive-Form Games
        B.2    A Normal-Form Representation
        B.3    Subgames and Subgame Perfect Equilibrium
        B.4    Exercises

C    Undercut-Proof Equilibria
        C.1    The Simplest Product Differentiation Model
        C.2    Nonexistence of a Nash-Bertrand Equilibrium
        C.3    The Undercut-Proof Equilibrium
        C.4    Four Important Properties of the UPE
        C.5    Exercises
        C.6    Selected References

--- The End ---