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on Network Economics |
| By: | Milne , Alistair (Faculty of Finance, Cass Business School and Bank of Finland) |
| Abstract: | The developed world exhibits substantial but poorly understood differences in the efficiency and quality of low-value payment services. This paper compares payments arrangements in the UK, Norway, Swe-den, and Finland, and discusses the impact of network effects on incentives to adopt new payments tech-nology. A model is presented, in which private benefits for investment in shared inter-bank payments in-frastructure are weak. In contrast, due to ‘account externalities’, there are strong incentives for investment in intra-bank payment systems. These two features, distinguishing bank payments from other network in-dustries, can help explain some of the observed cross country differences in payments arrangements. |
| Keywords: | network effects; incentives; payment technology; externalities |
| JEL: | G21 L14 |
| Date: | 2005–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2005_016&r=net |
| By: | Kauko, Karlo (Bank of Finland Research) |
| Abstract: | This paper presents a model depicting cross-border payment systems as a mixed oligopoly. A private net settlement system that maximises profit competes with the central banks’ gross settlement system that maximises welfare. It may be optimal for the central bank system to encourage increased use of the private system by charging fees that exceed the marginal cost. The central bank system is not only a competitor but also an essential service provider, because central bank money is needed for net settlement of payments in the private system. In some cases the central bank system can paradoxically induce the private system to charge lower fees by making it expensive to use central bank money for settlement purposes. |
| Keywords: | payment systems; network economics; mixed oligopolies |
| JEL: | F36 G29 L13 L44 |
| Date: | 2005–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2005_011&r=net |
| By: | Thomas Downes; Shane Greenstein |
| Abstract: | This study analyzes the geographic spread of commercial Internet Service Providers (ISPs), the leading suppliers of Internet access. The geographic spread of ISPs is a key consideration in U.S. policy for universal access. We examine the Fall of 1998, a time of minimal government subsidy, when inexpensive access was synonymous with a local telephone call to an ISP. Population size and location in a metropolitan statistical area were the single most important determinants of entry, but their effects on national, regional and local firms differed, especially on the margin. The thresholds for entry were remarkably low for local firms. Universal service in less densely-populated areas was largely a function of investment decisions by ISPs with local focus. There was little trace of the early imprint of government subsidies for Internet access at major U.S. universities. |
| Keywords: | Internet; Universal service; Geographic diffusion; Telecommunications |
| JEL: | L10 L86 L96 R11 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:tuf:tuftec:0615&r=net |
| By: | Milne , Alistair (Cass Business School, London, UK and Bank of Finland) |
| Abstract: | This paper examines the impact of messaging and technical standards on competition in the supply of se-curities transaction management services. Two simple switching cost models are used to clarify the im-pact of standards on barriers to entry and on the incentives to adopt harmonised and simplified securities processing standards. Policy implications are discussed briefly. |
| Keywords: | securities settlement; standards; inter-operability; switching costs |
| JEL: | L15 L86 |
| Date: | 2005–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2005_023&r=net |
| By: | Michal Grajek; Tobias Kretschmer |
| Abstract: | In this paper, we study the dynamics of usage intensity of second-generation cellular telephony over the diffusion curve. We address two specific questions: First, does information about usage intensity over time allow us to draw conclusions about the underlying drivers of technology diffusion? Seconds, what effect does the existence and penetration of previous generations and other networks in the same generation on network usage intensity? Using an operator-level panel covering 41 countries with quarterly data over 6 years, we find that heterogeneity among adopters dominates network effects and that different technological generations are complements in terms of usage, but substitutes in terms of subscription. <br> <br> <i>ZUSAMMENFASSUNG - (Gebrauch und Infusion von Mobilfunktelefonie, 1998-2004) <br> In diesem Beitrag untersuchen wir die Dynamik der Gebrauchsintensität von Mobilfunktelekommunikation zweiter Generation (D-Netzwerk in Deutschland) in verschiedenen Phasen ihrer Marktdiffusion. Wir stellen zwei spezifische Fragen: Erstens, kann man an Hand der Informationen über die Gebrauchsintensität die zugrundeliegenden Treiber der Technologiediffusion identifizieren? Zweitens, welche Auswirkung haben die Existenz und die Marktdurchdringung der vorherigen Generationen und andere Netzwerke derselben Generation auf die Gebrauchsintensität eines Mobilfunknetzwerks? Mittels der Paneldaten auf Netzwerkbetreiberebene, die 41 Nationen vierteljährlich über 6 Jahre umspannen, finden wir, dass die Abonnentenheterogenität die Netzwerkeffekte dominiert. Außerdem stellt sich heraus, dass die unterschiedlichen Technologiegenerationen bezüglich der Gebrauchsintensität komplementär zueinander sind, jedoch bezüglich ihrer Subskription Substituten darstellen.</i> |
| Keywords: | Cellular telephony, diffusion, network effects, consumer heterogeneity, fixed-mobile substitutability |
| JEL: | L1 L52 O38 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:wzb:wzebiv:spii2006-20&r=net |
| By: | Gitlesen, Jens Petter (University of Stavanger); Kleppe, Gisle (Stord/Haugesund University College (HSH)); Thorsen, Inge (Stord/Haugesund University College (HSH)); Ubøe, Jan (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration) |
| Abstract: | In this paper we present empirical results based on a network model for commuting flows. The model is a modified version of a construction introduced in Thorsen et al. (1999). Journeys-to-work are determined by distance deterrence effects, the effects of intervening opportunities, and the location of potential destinations relative to alternatives at subsequent steps in the transportation network. Calibration is based on commuting data from a region in Western Norway. Estimated parameter values are reasonable, and the explanatory power is found to be very satisfying compared to results from a competing destinations approach. We also provide theoretical arguments in favor of a network approach to represent spatial structure characteristics. |
| Keywords: | Journeys-to-work; transportation network; network approach; spatial structure characteristics |
| JEL: | C13 C51 C52 |
| Date: | 2006–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2006_004&r=net |