• Journal of the Korea Safety Management & Science
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• v.1 no.1
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• pp.217-230
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• 1999

The prevalent phenomenon in the high technology market shows market-determined do facto standard is preferred to de jure standard determined by formal organization. The purpose of the study is to provide a framework to empirically examine the relationship between network externalities and switching costs from the consumer's point of view Key findings of the study are ： First, physical compatibility and upgradability are positively related to the network externalities. Second, conceptual compatibility and expertise are negatively related to the switching costs. Third, the network externalities and the switching costs are positively related to the continuous usage decision. Finally, the network externalities are positively related to the switching costs. The followings are major implications of the study. First, network externalities and bandwagon effects have different causal relationship respectively. Second, contrast to Weiss and Heide's (1993) study, the study suggests multiple dimensions of compatibility, Third, physical compatibility and upgradability increase switching costs through network externalities as the moderator.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.42 no.2
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• pp.1-8
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• 2019

Network externalities are essentially dynamic in that the value consumers feel about a product is affected by the size of the existing customer base that uses that product. However, existing studies on network externalities analyzed the effects of network externalities in a static way, not dynamic. In this study, unlike previous studies, the impact of network externalities on price competition in a vertically differentiated market is dynamically analyzed. To this end, a two-period duopoly game model was used to reflect the dynamic aspects of network externalities. Based on the game model, the Nash equilibria for price, sales volume, and revenue were derived and numerically analyzed. The results can be summarized as follows. First, if high-end product has strong market power, the high-end product vendor takes almost all benefits of the network externality. Second, when high-end product has strong market power, the low-end product will take over most of the initial sales volume increase. Third, when market power of high-end product is not strong, it can be seen that the effects of network externalities on the high and low-end products are generally proportional to the difference in quality. Lastly, if there exists a strong network externality, it is shown that the presence of low-end product can be more profitable for high-end product vendor. In other words, high-end product vendor has incentive to disclose some technologies for the market entrance of low-end product, even if it has exclusive rights to the technologies. In that case, however, it is shown that the difference in quality should be maintained significantly.

• Proceedings of the Korean Institute of Information and Commucation Sciences Conference
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• 2002.05a
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• pp.425-428
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• 2002

To understand and forecast the wireless internet market in Korea, we will analyse the network externalities in wireless internet market into communication network externalities and hardware/software network externalities. The wireless market has two competing streams, one is mobile internet and the other is wireless fan internet. Both are characterized by strong network externalities which lead to increasing return to stale. Mobile internet is supposed more suitable for communication and WLAN for data. However these two system will compete in some area, and the critical factor to deride the winner is supposed to be the network externalities as in so many other high-tech industries had showed.

• The Journal of Korean Institute of Communications and Information Sciences
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• v.36 no.7B
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• pp.806-817
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• 2011

This paper constructed a model estimating mobile nework externalities based on Ofcom model and estimated externalities mark-up. The main results are as follows: 1) there are 15,626,711 marginal subscribers in mobile network irrespective of its maturity. 2) the value of network externalities ranges 2.1 billions won to 435.4 billions won. 3) the extrenalities mark-up to support marginal subscribers ranges 0.03 won to 6.47 won. This results provide useful implications to policy about mobile network terminations fee as well as externalities mark-up disputes.

• Asia pacific journal of information systems
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• v.33 no.3
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• pp.652-676
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• 2023

The objective of this study is to provide a deeper understanding of the factors that lead to the development and adoption of AI-based chatbots. We analyze the structural relationship between the organizational (externalities), systematic (fit), and the consumer-related (psychological) factors and their role in the adoption of AI-based chatbots. Founded on the theories of task-technology fit and network externalities, we present a conceptual model overlooking common perception-based theories (e.g., Technology Acceptance Model). We collected 380 responses from Indian banking consumers to test the model using the PLS-SEM method. Interestingly, the findings present a positive impact of all factors on consumers' intention to adopt AI-based chatbots. However, the interplays between these factors provide a mixed perspective for literature. Apart from employing a combination of factors that have been used to study technology adoption, our study explores the importance of externalities and their relationship with fit factors, a unique outlook often overlooked by prior research. Moreover, we offer a clear understanding of latent variables such as trust, and the intricacies of their interplays in a novel context. Thereby, the study offers implications for literature and practice, followed by future research directions.

• Information Systems Review
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• v.15 no.2
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• pp.91-110
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• 2013

Due to the intense competition and low switching cost, to find out which factors will significantly impact on user's continuance intention is very important for mobile instant messaging (IM) practitioners. In this study, we adopted network externalities and perceived service quality as independent variables based on the definition of mobile IM service. Network externalities also include direct externalities (referent network size) and indirect externalities (perceived complementarity). The result of this study shows that referent network size has a critical influence on perceived usefulness and perceived complementarity has a critical influence on perceived enjoyment; perceived service quality, as we expected, has significantly impact on not only customer's satisfaction but also perceived usefulness and perceived enjoyment. Meanwhile, both perceived usefulness and perceived enjoyment have directly critical influences on customer's continuance intention.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.44 no.1
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• pp.37-44
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• 2021

The information products dramatically reduce the production costs of vertically differentiated products. Information products are also more likely to be affected by network externalities. Thus the proliferation of digital products is increasing the interests in network externality and vertical product differentiation. In step with this trend, the impact of network externalities on price competition in vertically differentiated markets has been continuously studied. Existing studies related to this topic have assumed that network externalities increase consumers' willingness to pay per unit quality. The results show that higher quality products are affected more by network externality. However, network externality is essentially a concept affected by the size of the consumer, not a concept associated with quality. In this work, unlike previous studies, we present a new market model that reflects the essential definition of network externality. Based on the proposed market model, we derive both simultaneous and sequential Nash equilibria and analyze them numerically. The main results obtained from the analysis can be summarized as follows. First, network externalities primarily increase the demand for low-quality products and have a secondary impact on the demand for high-quality products. Second, the larger the quality difference between products, the more profitable they are. It also has been shown that sequential pricing methods are more advantageous in terms of revenue than simultaneous pricing method.

• Journal of Information Technology Services
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• v.12 no.1
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• pp.51-67
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• 2013

Mobile Instant Messenser (MIM) Market With the market is enlarging and attracting more and more companies. With the market expanding and number of users increasing, the competition in this area will be fierce. In order to gain competitive advantage, it is important to develop a strategy to maximize user value and to grasp the continuous usage intention of users. However, there are currently not enough researches done in this field. Therefore, this paper to study the effects of network externalities and perceived experiential value on perceived usefulness, user satisfaction, and continuous usage intention. The research results showed that the perceived experiential value and vertical compatibility significantly affected user satisfaction, but the perceived network size did not. The perceived network size and vertical compatibility did not affect the perceived usefulness. Also, the economic value, which is a sub-factor of the perceived experiential value, did not affect the perceived usefulness, but the functional value and hedonic value did significantly. The perceived network size significantly affected continuance usage intention, but the perceived network compatibility did not.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.40 no.1
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• pp.105-113
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• 2017

Network externality can be defined as the effect that one user of a good or service has on the value of that product to other people. When a network externality is present, the value of a product or service is dependent on the number of others using it. There exist asymmetries in network externalities between the online and traditional offline marketing channels. Technological capabilities such as interactivity and real-time communications enable the creation of virtual communities. These user communities generate significant direct as well as indirect network externalities by creating added value through user ratings, reviews and feedback, which contributes to eliminate consumers' concern for buying products without the experience of 'touch and feel'. The offline channel offers much less scope for such community building, and consequently, almost no possibility for the creation of network externality. In this study, we analyze the effect of network externality on the competition between online and conventional offline marketing channels using game theory. To do this, we first set up a two-period game model to represent the competition between online and offline marketing channels under network externalities. Numerical analysis of the Nash equilibrium solutions of the game showed that the pricing strategies of online and offline channels heavily depend not only on the strength of network externality but on the relative efficiency of online channel. When the relative efficiency of online channel is high, the online channel can greatly benefit by the network externality. On the other hand, if the relative efficiency of online channel is low, the online channel may not benefit at all by the network externality.

• Korean Management Science Review
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• v.26 no.3
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• pp.169-184
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• 2009

Recently, mobile telecommunication businesses contend with each other to expand their customer base by using aggressive marketing strategies. In order to determine if there strategies are effective, customer's switching behavior needs to be studied. This study identifies and analyzes direct, indirect factors that may customer switching behavior : attractiveness of alternatives, network externality, and switching cost. Results reveals that attractiveness of alternatives, network externalities have a direct impact on customer switching behavior. These two factors also have moderating effects on customer switching behavior but the switching cost does not In short, network externalities and alternatives strategically determine the success of 3.5G service. In this regard, mobile business should improve their own attractiveness of alternatives by developing specialized service in 3.5G service.