The Economics of Internet Companies
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Ayla Ogus, Michael de la Maza, Deniz Yuret (1999)
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The Economics of Internet Companies. Computing in Economics and
Finance, Fifth International Conference of the Society for
Computational Economics. Boston College.
Abstract:
In this paper, we analyze the effects of brand loyalty and network
effects on the fortunes of Internet companies in an agent-based
model. We find that brand loyalty and network effects produce
interesting dynamics when included together in a simulated Internet
which are very different from the dynamics observed when only one or
neither of these effects are present. If both brand loyalty and
social communication are high, a loyal user can be convinced to switch
web sites, thus causing large and traumatic changes in the fortunes of
the Internet companies.