Referral rewards programs are traditionally argued to be valuable in fostering word-of-mouth communication. However, they may also help to mitigate the coordination problem in the adoption of a new product that displays network externalities in consumption, by insuring early adopters against the...

Upstream players produce design ideas and downstream players select among these ideas to develop finished products. Design diversity is valuable at the upstream stage and coordination is valuable at the downstream stage, in the sense that this maximizes the sum of payoffs to all players....