Table 1 Empirical studies assessing the economic results of network effects across user groups
From: Network effects in two-sided markets: why a 50/50 user split is not necessarily revenue optimal
Authors | Main research topics | Data gen. | Analysis methods | Industry/data sets | Economic dependent variables | Considers | |
|---|---|---|---|---|---|---|---|
CNE | SNE | ||||||
Ackerberg and Gowrisankaran (2006) | NEs for banks and customers | T | Max. likelihood | ACH banking | Number of transactions | Yes | No |
Brynjolfsson and Kemerer (1996) | User base on price | M | Semi-log, OLS | Spreadsheet software | Prices | Yes | No |
Chacko and Mitchell (1998) | User base on company growth | M | OLS | 3 technology sectors | Corporate growth rate | Yes | No |
Chao and Derdenger (2013) | NEs on revenue-opt. price structure | M | Regression with IV | Portable game consoles | Associated prices | Yes | No |
Chen and Xie (2007) | Implications of customer loyalty | M | Regression | Newspaper | Advertising rate, market share diff. | Yes | No |
Chu and Manchanda (2013) | User base on other group’s growth | T | Max. likelihood | C2C retail platform | Growth of other user group | Yes | No |
Clements and Ohashi (2005) | Indirect NEs, hardw. diffusion | M | Two-stage least squares | Video game systems | Hardware and software adoption | Yes | No |
Gandal et al. (2000) | Hardw. prices and softw. on diffusion | M | OLS | CD players and titles | Change in variety and sales | Yes | No |
Mantrala et al. (2007) | Marketing invest on profits | M | Two-segment SURE | Newspapers | Subscriptions, ad revenue, sales | Yes | No |
Nair et al. (2004) | Indirect NEs in competition | M | Monte Carlo, OLS | PDAs and software | Hardw. demand, softw. provision | Yes | No |
Rysman (2004) | Importance of CNEs | M | Nested logit | Yellow pages | Consumer and advertiser demand | Yes | No |
Rysman (2007) | Card usage and acceptance | M, T | Logit | Payment card transactions | Choice of favorite network | Yes | No |
Shankar and Bayus (2003) | Network strength in competition | M | SEM | Video game consoles | Network strength | Yes | No |
Wilbur (2008) | Ads on audience size and vice versa | M | Logit | TV ads | Viewer and advertiser demand | Yes | No |
Asvanund et al. (2004) | Incremental value of new users | T | Logit, OLS | Peer-to-peer networks | Network value | Yes | Yes |
Sridhar et al. (2011) | Optimal marketing invests with CNEs | M | DMR | Local newspaper | Demand from both sides | Yes | (Yes) |
Tucker and Zhang (2010) | Installed base on listing behavior | F | Probit | Classifieds platform | Number of listings | Yes | Yes |
This paper | Network effects on revenue; revenue-optimal user split | T | SURE, logit, OLS | Online dating platform | Revenue, user net gain, number of subscribers | Yes | Yes |