The Economics of Online Markets and ICT Networks (eBook)

Introduction 12
Part I: Innovation and Competition in Online Markets 13
Part II: Regulation, Pricing and Evaluation by Real Options 14
Part III: Empirical Approaches to Market Analysis 16
Part I: Innovation and Competition in Online Markets 18
1 Pricing and Bundling of Shared Information Goods: The Case of Cable Channels 19
Introduction 19
Notation and Assumptions 20
Pricing and Bundling with Identical Consumers 22
Heterogeneous Subscriber Preferences 23
Final Remarks 30
Appendix 31
References 33
2 The Development of Electronic Payments Systems 34
Introduction 34
Trends in Electronic Payments 35
Development of Payments Card Systems 37
Empirical Evidence 44
Public Policy 47
The Future 48
References 49
3 Behavioral Frictions in Online Contracting: Evidence from Yankee Auctions 50
Introduction 50
Data Set 52
Cluster Analysis 54
Bidding Behavior 57
Quantity Outcomes 63
Conclusions 67
References 68
4 Online Channel Competition in a Differentiated Goods Market 69
Introduction 69
Pure Online Competition 70
Online Channel Entry by an Offline Firm 73
Asymmetric Quality Goods and Competition 77
Conclusion 82
References 83
5 Competition and Growth in Virtual Markets 84
Introduction 84
Alternative Equilibrium States 85
Firm Investment and Market Share 86
No Market Growth Game 87
Market Growth Game 92
Comparative-static Analysis 94
Conclusions 97
References 97
6 Mobile Network Prospects: A Multi-sided Platform Analysis of Competition 98
Introduction 98
Market Demand 98
Incompatible Goods and Cournot Competition 99
Compatible Goods Case 100
Scenario 1 102
Multi-sided Service Markets and the OMTP Standard 104
Scenario 2 106
Operator Profit from Multi-sided Services 108
Scenario 3 109
References 117
Part II: Regulation, Pricing and Evaluation by Real Options 118
7 Real Options and Telecommunications Regulation 119
Introduction 119
Neoclassical and Real Options Investment Theory 120
A Call Option from Investment Delay 121
Real Option Theory and Telecommunications Regulation 122
The Truncation Problem and Real Option Theory 127
Conclusion 129
Appendix 130
References 131
8 A Discrete Real Options Approach to Access Pricing 134
Introduction 134
The Model 135
An Illustration 139
Concluding Remarks 144
References 145
9 Optimal Pricing with Sunk Cost and Uncertainty 147
Introduction 147
Literature Review 148
Regulation and Pricing 149
Conclusion 157
References 158
10 Efficient Spectrum Policy Using Real Options and Game Theoretic Methods 160
Background 160
Theoretical Framework 161
Next Generation Convergence Services 164
Numerical Simulation 165
Concluding Remarks 168
References 168
11 A Real Options Approach to Investment Evaluation with a Network Externality 170
Introduction 170
Model Specification 171
Project Valuation 174
Numerical Illustration 175
Analyzing Mixed Scenarios 179
Conclusion 182
Appendix 182
Acknowledgement 185
Reference 185
Part III: Empirical Approaches to Market Analysis 186
12 Mixed Logit Analysis of Carrier Market Share with Stated- preference Data 187
Introduction 187
Revealed- versus Stated-preference 188
Stated-preference Data Analysis with Mixed Logit Models 192
Telecommunications Demand Case Study 195
Conclusions 203
References 203
13 Information Technology, Corporate Performance and Firm Size 205
Introduction 205
Literature Review 206
Research Method 208
Estimation Results 211
Conclusions 215
References 216
14 A Contingent Valuation of Terrestrial DMB Services 217
Introduction 217
Background 218
Contingent Valuation Survey 219
Compensating Variation Valuation of T-DMB Services 221
Conclusion 226
Appendix: DMB Contingent Valuation Question 227
References 227
15 Consumer Preference for New Wireless Data Services 228
Introduction 228
Emerging Mobile Data Services in Korea 229
Consumer Preference for Emerging Services 230
Results 234
Conclusions 238
Appendix: AHP Questionnaire 240
References 243
16 An International SME E-marketplace Networking Model 245
Introduction 245
Background 245
APEC Global B2B Interoperability Project 247
Project Evaluation 252
Conclusion 256
References 256
List of Contributors 258
Index 264