Adoption of bundled services with network externalities and correlated affinities
Abstract
The goal of this paper is to develop a principled understanding of when it is beneficial to bundle technologies or services whose value is heavily dependent on the size of their user base, i.e., exhibits positive exernalities. Of interest is how the joint distribution, and in particular the correlation, of the values users assign to components of a bundle affect its odds of success. The results offer insight and guidelines for deciding when bundling new Internet technologies or services can help improve their overall adoption. In particular, successful outcomes appear to require a minimum level of value correlation.
Keywords
Cite
@article{arxiv.1310.4429,
title = {Adoption of bundled services with network externalities and correlated affinities},
author = {Roch Guérin and Jaudelice C. de Oliveira and Steven Weber},
journal= {arXiv preprint arXiv:1310.4429},
year = {2013}
}
Comments
29 pages, 5 figures. Submitted on September 30, 2013 to the ACM Transactions on Internet Technology in response to Call for Papers for "Theme Section on Pricing and Incentives in Networks and Systems". Preliminary work presented as a poster at the June 2013 W-PIN+NetEcon 2013 Joint Workshop on Pricing and Incentives in Networks and Systems