Network Effects
to refine our understanding of the concepts studied in this module by engaging in discussions and learning from different points of view. For “Discussion Forum 1″, answer the following question:
” Are one-sided and two-sided markets equally beneficial for consumers? Explain with examples based on network effects.”
References should not be counted in the final word count of the post, you can use any format (MLA / APA / etc.) for the references if included) minimum of 3 scholarly sources
This assignment will be graded as follows –
1) Breadth of the post: Meet word limit for the initial post (at least 250 words) (10 points)
2) Depth of the post: Apply at least two concepts covered in this module in the post. Must be clearly stated and highlighted (use either bold / underline / bullet points or headings) in the post (5 x 2 = 10 points)
3) Specificity of the post : Clearly identify specific example(s) for the discussion and it must be highlighted (use either bold / underline / bullet points or headings) in the post (5 points)
4) Interactiveness of the forum: Respond to at least 3 posts (4 X 3 = 12 points) **
Sample Solution
To understand the key sources of network value, it is important to recognize the structure of the network. Some networks derive most of their value from a single class of users. Economists would call this a one-sided market. But some markets are comprised of two distinct categories of network participant. Economists would call this kind of network a two-sided market. In one-sided markets, users gain benefits from interacting with a similar category of users (think instant messaging, where everyone can send and receive messages to one another). In two-sided markets, users gain benefits from interacting with a separate, complementary class of users (e.g., in the video game industry console owners are attracted to platforms with the most games, while innovative developers are attracted to platforms that have the most users).
