Valuation Of Network Effects In Software Markets
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Valuation Of Network Effects In Software Markets
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Author : Andreas Kemper
language : en
Publisher: Springer Science & Business Media
Release Date : 2009-12-12
Valuation Of Network Effects In Software Markets written by Andreas Kemper and has been published by Springer Science & Business Media this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-12-12 with Business & Economics categories.
The customer base is an important value driver of software companies and a reliable prediction of its development is fundamental for investment decisions. A particularity in software markets is that an individual’s purchasing decision is often influenced by other users’ choices. Although such customer network effects are evident, their quantitative assessment remain elusive with conventional approaches. This book contributes to closing this gap by developing methods for measuring network effects and their implications for valuation in software markets. Based on the theory of complex networks the book reveals that such diffusion processes highly depend on structural properties of customer networks. Moreover, it depicts that such insights are contributions to improve the quality of valuations in software markets. But the implications of this research also comprise social and political aspects as they can be applied in order to prevent corporate failures in all network effect markets.
Valuation Of Network Effects In Software Markets
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Author : Andreas Kemper
language : en
Publisher: Springer
Release Date : 2010-04-18
Valuation Of Network Effects In Software Markets written by Andreas Kemper and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-04-18 with categories.
The customer base is an important value driver of software companies and a reliable prediction of its development is fundamental for investment decisions. A particularity in software markets is that an individual's purchasing decision is often influenced by other users' choices. Although such customer network effects are evident, their quantitative assessment remain elusive with conventional approaches. This book contributes to closing this gap by developing methods for measuring network effects and their implications for valuation in software markets. Based on the theory of complex networks the book reveals that such diffusion processes highly depend on structural properties of customer networks. Moreover, it depicts that such insights are contributions to improve the quality of valuations in software markets. But the implications of this research also comprise social and political aspects as they can be applied in order to prevent corporate failures in all network effect markets.
Trial And Pricing Strategies Of Software Market With Competition And Network Effects
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Author : Zhenhua Wu
language : en
Publisher:
Release Date : 2016
Trial And Pricing Strategies Of Software Market With Competition And Network Effects written by Zhenhua Wu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
In this paper, we develop a framework to generally characterize the equilibrium trial and pricing strategies of oligopoly software market, when there exist competition, network effects (externalities), uncertainty on software functionality, network maintaining cost and compatibility issues. We find that, in equilibrium, the restriction on network effects is decreasing with network effects, but increasing with consumers' basic willingness to pay. Meanwhile, the restriction on functionality is increasing with the posterior on the functionality after trial. The equilibrium price has a non-linear relation with the equilibrium network effects in a monopoly market and a market with completely incompatible software. However, the equilibrium price is set to maintaining cost in a market with completely compatible software. Moreover, we find that incompatibility could generate an equilibrium under which identical firms choose different trial and pricing strategies, and all consumers who want to purchase software are divided by firms on the market.
Modeling Software Markets
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Author : Falk Graf Westarp
language : en
Publisher: Springer Science & Business Media
Release Date : 2012-12-06
Modeling Software Markets written by Falk Graf Westarp and has been published by Springer Science & Business Media this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-12-06 with Business & Economics categories.
As social beings, humans are not living in isolation but rather interact and communicate within their social network via language, meant to convey parts of some conceptualization from the sender to a single recipient or a set of recipients. Communities of agents not only share a common language but also the individual conceptualizations of the world (real and abstract) have to overlap to a significant extent, allowing for efficient reference to whole conceptual structures like "the German constitution", "game theory" or "medical sciences". For "societies" of interacting technical devices or software agents the situation is not quite as Babylonian since although these agents are meant to act individually (and also have a private state and private knowledge) in most cases they are designed to refer to one common ontology or standardized protocol and thus do not have to deal with misunderstanding. However, the more these systems become interconnected, the more this situation resembles the one described for societies of human agents even though the misunderstanding might be easier to detect when the different reference ontologies are made explicit and published. Obviously, in both cases standardization of a common language or set of rules for interaction reduces the individual degree of freedom for the sake of compatibility and benefits derived from interaction. In his work, Falk Graf von Westarp addresses the software market as a domain strongly depending on compatibility effects of the individuals' decisions.
Networks Crowds And Markets
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Author : David Easley
language : en
Publisher: Cambridge University Press
Release Date : 2010-07-19
Networks Crowds And Markets written by David Easley and has been published by Cambridge University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-07-19 with Computers categories.
Are all film stars linked to Kevin Bacon? Why do the stock markets rise and fall sharply on the strength of a vague rumour? How does gossip spread so quickly? Are we all related through six degrees of separation? There is a growing awareness of the complex networks that pervade modern society. We see them in the rapid growth of the internet, the ease of global communication, the swift spread of news and information, and in the way epidemics and financial crises develop with startling speed and intensity. This introductory book on the new science of networks takes an interdisciplinary approach, using economics, sociology, computing, information science and applied mathematics to address fundamental questions about the links that connect us, and the ways that our decisions can have consequences for others.
The Cold Start Problem
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Author : Andrew Chen
language : en
Publisher: Random House
Release Date : 2021-12-07
The Cold Start Problem written by Andrew Chen and has been published by Random House this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-12-07 with Computers categories.
'A true Silicon Valley insider' Wired Why do some products take off? And what can we learn from them? The hardest part of launching a product is getting started. When you have just an idea and a handful of customers, growth can feel impossible. This is the cold start problem. Now, one of Silicon Valley's most esteemed investors uncovers how any product can surmount the cold start problem - by harnessing the hidden power of network effects. Drawing on interviews with the founders of Uber, LinkedIn, Airbnb and Zoom, Andrew Chen reveals how any start-up can launch, scale and thrive. _ 'Chen walks readers through interviews with 30 world-class teams and founders, including from Twitch, Airbnb and Slack, to paint a picture of what it takes to turn a start-up into a massive brand' TechCrunch 'Articulates the stages that every product must go through to be successful . . . and illustrates what companies need to do to achieve them' Forbes
Handbook Of Industrial Organization
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Author : Richard Schmalensee
language : en
Publisher: North Holland
Release Date : 1989-09-11
Handbook Of Industrial Organization written by Richard Schmalensee and has been published by North Holland this book supported file pdf, txt, epub, kindle and other format this book has been release on 1989-09-11 with Business & Economics categories.
Handbook of industrial organization/Schmalensee.-V.2.
Network Effects Nonlinear Pricing And Entry Deterrence
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Author : Arun Sundararajan
language : en
Publisher:
Release Date : 2014
Network Effects Nonlinear Pricing And Entry Deterrence written by Arun Sundararajan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
A number of technology products display positive network effects, and are used in variable quantities by heterogeneous customers. Examples include operating systems, infrastructure and back-end software, web services and networking equipment. This paper studies optimal nonlinear pricing for such products, under incomplete information, and with the threat of competitive entry. Both homogeneous and heterogeneous network effects are modeled. Conditions under which a fulfilled-expectations contract exists and is unique are established. While network effects generally raise prices, it is shown that accompanying changes in consumption depend on the nature of the network effects - in some cases, it is optimal for the monopolist to induce no changes in usage across customers, while in others cases, network effects raise the usage of all market participants. Optimal pricing is shown to include quantity discounts that increase with usage, and may also involve a nonlinear two-part tariff. These results highlight the impact of network effects on trade-offs between price discrimination and value creation, and have important managerial implications for pricing policy in technology markets. The need to deter competitive entry generally lowers profits for the monopolist, and increases customer surplus. When network effects are homogeneous across customers, the resulting entry-deterring monopoly contract is a fixed fee and results in the socially optimal outcome. However, when the magnitude of heterogeneous network effects is relatively high, there are no changes in total surplus induced by the entry threat, and the price changes merely cause a transfer of value from the seller to its customers. The presence of network effects, and of a credible entry threat, are also shown to increase distributional efficiency by reducing the disparity in relative value captured by different customer types. Regulatory and policy implications of these results are discussed.
Networks Effects Nonlinear Pricing And Entry Deterrence
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Author : Arun Sundararajan
language : en
Publisher:
Release Date : 2009
Networks Effects Nonlinear Pricing And Entry Deterrence written by Arun Sundararajan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.
A number of technology products display positive network effects, and are used invariable quantities by heterogeneous customers. Examples include operating systems, infrastructureand back-end software, web services and networking equipment. This paper studies optimalnonlinear pricing for such products, under incomplete information, and with the threat of competitiveentry. Both homogeneous and heterogeneous network effects are modeled. Conditions underwhich a fulfilled-expectations contract exists and is unique are established. While network effectsgenerally raise price, it is shown that accompanying changes in consumption depend on the natureof the network effects - in some cases, it is optimal for the monopolist to induce no changes in usageacross customers, while in others cases, network effects raise the usage of all market participants.Optimal pricing is shown to include quantity discounts that increase with usage, and may also involvea nonlinear two-part tariff. These results highlight the impact of network effects on trade-offsbetween price discrimination and value creation, and have important managerial implications forpricing policy in technology markets.The need to deter competitive entry generally lowers profits for the monopolist, and increasescustomer surplus. When network effects are homogeneous across customers, the resulting entry-deterringmonopoly contract is a fixed fee and results in the socially optimal outcome. However,when the magnitude of heterogeneous network effects is relatively high, there are no changes intotal surplus induced by the entry threat, and the price changes merely cause a transfer of valuefrom the seller to its customers. The presence of network effects, and of a credible entry threat, arealso shown to increase distributional efficiency by reducing the disparity in relative value capturedby different customer types. Regulatory and policy implications of these results are discussed.
Platform Revolution How Networked Markets Are Transforming The Economyand How To Make Them Work For You
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Author : Geoffrey G. Parker
language : en
Publisher: W. W. Norton & Company
Release Date : 2016-03-28
Platform Revolution How Networked Markets Are Transforming The Economyand How To Make Them Work For You written by Geoffrey G. Parker and has been published by W. W. Norton & Company this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-03-28 with Business & Economics categories.
A practical guide to the new economy that is transforming the way we live, work, and play. Uber. Airbnb. Amazon. Apple. PayPal. All of these companies disrupted their markets when they launched. Today they are industry leaders. What’s the secret to their success? These cutting-edge businesses are built on platforms: two-sided markets that are revolutionizing the way we do business. Written by three of the most sought-after experts on platform businesses, Platform Revolution is the first authoritative, fact-based book on platform models. Whether platforms are connecting sellers and buyers, hosts and visitors, or drivers with people who need a ride, Geoffrey G. Parker, Marshall W. Van Alstyne, and Sangeet Paul Choudary reveal the what, how, and why of this revolution and provide the first “owner’s manual” for creating a successful platform business. Platform Revolution teaches newcomers how to start and run a successful platform business, explaining ways to identify prime markets and monetize networks. Addressing current business leaders, the authors reveal strategies behind some of today’s up-and-coming platforms, such as Tinder and SkillShare, and explain how traditional companies can adapt in a changing marketplace. The authors also cover essential issues concerning security, regulation, and consumer trust, while examining markets that may be ripe for a platform revolution, including healthcare, education, and energy. As digital networks increase in ubiquity, businesses that do a better job of harnessing the power of the platform will win. An indispensable guide, Platform Revolution charts out the brilliant future of platforms and reveals how they will irrevocably alter the lives and careers of millions.