We study the behavior of experimental subjects who have to make a sequence of risky investment decisions in the presence of network externalities. Subjects follow a simple heuristic investing after positive experiences and reducing their propensity to invest after a failure. This result...

Network diffusion models are used to study things like disease transmission, information spread, and technology adoption. However, small amounts of mismeasurement are extremely likely in the networks constructed to operationalize these models. We show that estimates of diffusions are highly...

This paper analyzes the relative economic power position of home carriers in hub-and-spoke systems. Hub-and-spoke systems may lower costs on densely traveled routes and enable economically viable operations on less densely traveled routes. The reverse side is probably that carriers enjoy...

We discuss network neutrality regulation of the Internet in the context of a two-sided market model. Platforms sell broadband Internet access services to residential consumers and may set fees to content and application providers on the Internet. When access is monopolized, cross-group...

We discuss network neutrality regulation of the Internet in the context of a two-sided market model. Platforms sell broadband Internet access services to residential consumers and may set fees to content and application providers on the Internet. When access is monopolized, cross-group...

How can firms profitably give away free products? This paper provides a novel answer and articulates tradeoffs in a space of information product design. We introduce a formal model of two-sided network externalities based in textbook economics - a mix of Katz & Shapiro network effects, price...

Many platforms that facilitate transactions between buyers and sellers charge ad valorem fees in which fees depend on the transaction price set by sellers. Given these platforms do not incur significant costs that vary with transaction prices, their use of ad valorem fees has raised...

"Two-sided" markets have two different groups of customers that businesses have to get on board to succeed - there is a "chicken-and-egg" problem that needs to be solved. These industries range from dating clubs (men and women), to video game consoles (game developers and users), to credit cards...

We consider a platform that carries content from two upstream content providers and presents personalized recommendations to participating customers. We focus on streaming platforms in media markets, where users pay a subscription fee to join the platform but no usage fee, and consume a mix of...

This paper analyzes the economics of industries where network externalities are significant. In such industries, firms have strong incentives to adhere to common technical compatibility standards so that they reap the network externalities of the whole group. However, a firm also benefits from...