Contents
Preface

Introduction to Network Economics
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 Principies 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 Adoption: 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 Analysis
5.3 Interconnections
5.4 Exercises
5.5 Selected References

6 Broadcasting
6.1 Broadcasting and Cable Television
6.2 Spectrum Aliocation
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 Telier 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 Networks
11.2 Religious Affiliations as Networks
11.3 Lawsuits and Lawyers
11.4 International Time Coordination
11.5 Who's Driving on the "Wrong" Side of the Road?
11.6 Exercises
11.7 Selected References

Appendices
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
13.1 Defining Strategies and Outcomes in Extensive-Form Games
B.2 A Normal-Form Representation
B.3 Subgames and Subgame-Perfect Equilibria
13.4 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
Index