We have added two new reports to our series, Networks & Platforms: The Economics of Order.
The first of those new reports, and our fourth report overall, is The Anti-Network: Search And Other Non-Networks. We have made the point before that a full understanding of networks and their implications has been impeded by a tendency to confuse networks with other mechanisms of collective social or economic coordination. For example, our second report was devoted to sorting out the usually-confused concepts of networks and platforms. As we discussed, the confusion had obscured the essential characteristic of networks. Clarifying the distinction allowed us to determine, among other things, the core output of and source of value in networks.
Unfortunately, the tendency to confuse networks and platforms does not exhaust the network-related confusion common in industry commentary and analysis. Consequently, the aim of our new report is to further disentangle networks and platforms from other aspects of the “machinery” of social and economic coordination and to create a clear taxonomy of this machinery. Specifically, we cover search (and, in particular, search engines), so-called “data network effects” and virality, all of which are often mischaracterized as networks or platforms. We then address the implications of our analysis for strategic marketplace behaviour by search providers.
The second of the new reports is Networks, Supplier Costs, Risk & the Remaking of Supply Curves. Our previous reports have stressed the users’ perspective – the characteristics of demand, the source of value to users, the interplay of user preferences with network size and stability, network formation, the needs satisfied by networks and other mechanisms of coordination, and other related topics. In this report, we examine the implications of networks for (a) the supply not only of network goods but of goods in all markets, (b) risk and (c) supplier costs. As far as we are aware, no one has, until now, addressed or even recognized the fundamental connection between networks and supply. Addressing the role of networks in supply and incorporating a more sophisticated understanding of the interplay between supplier decision-making, cost causality, capital choice and risk also reveals the fundamental dynamic of which the standard textbook short-run/long-run dichotomy is a clumsy approximation. In the process, our analysis yields a comprehensive remaking of the supply curve and begins to make clear that networks are the foundation of the market order.
Downloadable tables of contents (TOCs) in pdf format are available, as with all other reports. They supplement the written description provided on each report’s web page. To access the TOC for any given report:
- Click on the “More Details” button associated with the report on our Reports page — this will take you to the web page dedicated to that report;
- Scroll down a bit and you will see a “DOWNLOAD TABLE OF CONTENTS (PDF)” link;
- Right-click and choose “Save Target as” or “Save Link as” to save the pdf to your device. Left-click on the link to open it in your browser.
Please do not hesitate to contact us if you have any questions regarding these or any of our other reports.