{"product_id":"microfoundations-of-the-network-effect-von-fabien-mercier","title":"Microfoundations of the Network Effect","description":"\u003cp\u003eThe industrial organisation literature typically assumes ex-ante utility functions to quantify the network effects of the various industries it models. In this book we present a simple analytical model which uses an explicit graph-theoretic modelling to simulate these network effects. The network effects it describes are fairly general since they are a mix of pure network effects ¿ being able to link to more agents ¿ and of potential cost-reductions stemming from decreasing marginal costs of the network infrastructure. The model can be applied to a variety of situations, such as telecommunication networks, the current Central Security Depositories network of cross-border links, or, alternatively, its associated custodian network. We derive close-forms of a (quadratic) network effect from the model. In particular it allows to quantify the advantage of a given individual to join a given network, and to split up analytically the various benefits expected from the network. We derive closed-form formulas in the case of homogeneous network and present the algorithms needed for Monte-Carlo simulations for the non-homogeneous case.\u003c\/p\u003e\u003cdiv class=\"aw-variant-hidden-subtitle-div\" id=\"aw-variant-subtitle-9786202010245\"\u003e\u003ch3\u003e\u003c\/h3\u003e\u003c\/div\u003e","brand":"Libri","offers":[{"title":"Softcover - 9786202010245","offer_id":39459564126301,"sku":"9786202010245","price":35.9,"currency_code":"EUR","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0940\/0622\/files\/ea76d449-c8ea-42fd-b4dc-5e1cf3073abd.jpg?v=1775711020","url":"https:\/\/shop.autorenwelt.de\/products\/microfoundations-of-the-network-effect-von-fabien-mercier","provider":"Autorenwelt Shop","version":"1.0","type":"link"}