Chapter 6

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Unformatted text preview: market (a market that derives mo st o f its value f ro m a single class o f users), and the netwo rk ef f ects derived f ro m IM users attracting mo re IM users as being same­side exch ange benef it s (benef its derived by interactio n amo ng members o f a single class o f participant). But so me markets are co mprised o f two distinct catego ries o f netwo rk participant. Co nsider video games. P eo ple buy a video game co nso le largely based o n the number o f really great games available f o r the system. So f tware develo pers write games based o n their ability to reach the greatest number o f paying custo mers, so they’re mo st likely to write f o r the mo st po pular co nso les f irst. Eco no mists wo uld call this kind o f netwo rk a t wo­sided market (netwo rk markets co mprised o f two distinct catego ries o f participant, bo th o f which that are needed to deliver value f o r the netwo rk to wo rk). When an increase in the number o f users o n o ne side o f the market (co nso le o wners, f o r example) creates a rise in the...
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This document was uploaded on 01/31/2014.

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