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E-Book

E-Book, Englisch, 268 Seiten, eBook

Beck The Network(ed) Economy

The Nature, Adoption and Diffusion of Communication Standards

E-Book, Englisch, 268 Seiten, eBook

ISBN: 978-3-8350-9213-6
Verlag: Deutscher Universitätsverlag
Format: PDF
Kopierschutz: Wasserzeichen (»Systemvoraussetzungen)



Roman Beck presents a new goods classification model to explore the dissemination of IT and e-business standards and designs two applications that support and improve firms' electronic interlaced communication by means of automation and standardization effects. He then examines how network effects drive the diffusion of communication standards and develops a model which is implemented as a simulation to show the dynamic interplay between direct and indirect network effects during the diffusion process. It also addresses critical mass and life cycle issues, as well as related utility changes in communication standards.

Dr. Roman Beck ist wissenschaftlicher Assistent von Prof. Dr. Wolfgang König am Institut für Wirtschaftsinformatik der Universität Frankfurt/Main.
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1;Foreword;6
2;Preface;10
3;Table of Contents;11
4;Figures;15
5;Tables;17
6;Equations;19
7;Variables and Symbols;21
8;Abbreviations;24
9;1 Introduction;27
9.1;1.1 Motivation and Research Questions;29
9.2;1.2 Structure of the Dissertation;35
10;2 Diffusion and Innovation Theory;41
10.1;2.1 Business Environment;41
10.2;2.2 Innovation Theory;43
10.3;2.3 Diffusion Theory;49
10.4;2.4 Diffusion of Public Goods and Infrastructure;53
10.5;2.5 Infrastructure and Networks as part of Public Goods;60
10.6;2.6 Diffusion Approaches in the Information Systems Discipline;63
11;3 Network Effect Theory;67
11.1;3.1 Network Effect Goods;67
11.2;3.2 The Diffusion of Network Effects Goods;75
11.3;3.3 Network Externalities: A Source of IVIarket Failure?;97
11.4;3.4 Diffusion Theory Revisited in the Light of Network Effects;99
12;4 Diffusion of E-Business Standards: Empirical Results;105
12.1;4.1 Research Framework;105
12.2;4.2 Diffusion of E-Business Standards;107
12.3;4.3 Globalization and Diffusion of E-Business Standards;119
12.4;4.4 Diffusion and Impact of E-Business Standards among SMEs;129
13;5 Developing E-Business Standards;149
13.1;5.1 Economics of Communication Standards: Integrating SIVIEs in EDI Supply Chains;150
13.2;5.2 Advancing Business Process Automation by Means of Customer Reputation Accounts;166
14;6 Simulation of the Diffusion of Network Effect Goods;185
14.1;6.1 Application of Network Effect Theory to Developing a Network of Mobile Service Users;186
14.2;6.2 Application of Network Effect Theory to Developing an EDI Network;214
15;7 Conclusions;241
15.1;7.1 Diffusion Theory in the Light of Network Effect Theory;242
15.2;7.2 Empirical Cross-Country Analysis of E-Business Diffusion;245
15.3;7.3 Development of E-Business Solutions;246
15.4;7.4 ACE-based Diffusion IViodel of Communication Standards;248
16;8 Future Research;251
16.1;8.1 strengthening the Empirical Foundation;251
16.2;8.2 Next Generation Mobile Communication Standards;252
16.3;8.3 Investigation of Wireless Broadband Standards Development;254
16.4;8.4 Development of Economic Models to explain the Diffusion of Wireless Broadband Standards;255
16.5;8.5 Developing Mobile Business IVIodels and Market Strategies;256
16.6;8.6 Grid-Economic Perspectives;257
17;References;261
18;Appendix: Global E-Commerce Survey;287

Diffusion and Innovation Theory.- Network Effect Theory.- Diffusion of E-Business Standards: Empirical Results.- Developing E-Business Standards.- Simulation of the Diffusion of Network Effect Goods.- Conclusions.- Future Research.


6 Simulation of the Diffusion of Network Effect Goods (S. 159-160)

The diffusion of communication standards such as traditional EDI standards, but also newer ones such as InternetEDI, WebEDI, or even XML-based data communication standards is lagging behind the expected degree of widespread use although the benefits accompanying with these standards were never in doubt. It is not only SMEs who have not completely adopted these standards, but also even large enterprises with massive communication traffic are often reluctant to adopt, and therefore do not use all possible electronic data communication standards.

EDI standards and communication standards in general seem to be special and different from other products or goods that can be used without the necessity of being a product that is widely adopted among other market participants. Therefore, the diffusion of such network effect standards is difficult to predict and often remains below the expected degree of diffusion. Standards which are not able to overcome the early phase of diffusion (from the start-up until reaching critical mass or threshold) will never become accepted market standards.

Apart from the diffusion of open, unsponsored EDI standards among firms this phenomenon is also observable for proprietary, sponsored standards in the telecommunication markets, such as for WAP, i-mode, or UMTS. While the anticipation of the possible diffusion paths of communication standards in unsponsored networks is of importance primarily for adopters (or potential adopters) of a new standard to enable them to decide whether to standardize or not, the anticipation of consumer behavior is also of importance for providers. If, e.g., a sponsored standard is competing with an unsponsored one, then a provider has a choice of certain market parameters for her penetration strategy.

Apart from subsidized prices or side payments, a provider can also stress certain components of a standard during the diffusion stage to meet the demands of potential adopters in accordance with the results of the market simulation. From an economic perspective, a focus on the user of a standard rather than concentration on the supplier is more interesting in terms of understanding the development of a user network characterized by adopter-side economies of scope. The findings of the microeconomic bottom-up view of the adoption behavior of single market participants reveal market strategies for suppliers, while an inverse macroeconomic top-down view cannot. As described earlier, the question of how to describe or even solve the start-up problem for communication and compatibility standards in network effect markets remains unanswered.

Due to the complex interplay between adopters of standards and the network benefits which change constantly during the diffusion process, the detailed analysis of all network externalities linked with the adoption is necessary to describe all possible paths of diffusion. Earlier research work on the diffusion of standards in network effect markets has focused on the allocation implications and market structure after overcoming the start-up problem, i.e. the market concentration tendency of sponsored standards towards a monopolistic market. But whether, however, the critical early diffusion phase up to the point of reaching critical mass can be overcome and described methodically, remains open so far.


Dr. Roman Beck ist wissenschaftlicher Assistent von Prof. Dr. Wolfgang König am Institut für Wirtschaftsinformatik der Universität Frankfurt/Main.


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