Firms are very aggressive in the early stages o f

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Unformatted text preview: markets where both sides pay for a product or service. I dentify examples where only one side pays. Whatfactors determine who should pay? Does paying have implications for the establishment and growth of a network effect? What might a firm do to encourage early network growth? 5. The Apple iPhone Developer Program provides developers access to the App Store where they can distribute their free or commercial applications to millions of iPhone and iPod touch customers. Would the iPhone market be considered a one or two‐sided market? 6.4 How Are These Markets Different? L E A RN I N G OBJ E C T I V E S 1. Understand how competition in markets where network effects are present differ from competition in traditional markets. 2. Understand the reasons why it is so difficult for late‐moving, incompatible rivals to compete in markets where a dominant, proprietary standard is present. When netwo rk ef f ects play a starring ro le, co mpetitio n in an industry can be f undamentally dif f eren...
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