The Economics of Internet Companies
Download: PS, PDF
Ayla Ogus, Michael de la Maza, Deniz Yuret (1999)
The Economics of Internet Companies. Computing in Economics and
Finance, Fifth International Conference of the Society for
Computational Economics. Boston College.
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.