This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

Journal of Economic Perspectives: Vol. 8 No. 2 (Spring 1994)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter

Explore:

JEP - All Issues


Network Externality: An Uncommon Tragedy

Article Citation

Liebowitz, S. J., and Stephen E. Margolis. 1994. "Network Externality: An Uncommon Tragedy." Journal of Economic Perspectives, 8(2): 133-150.

DOI: 10.1257/jep.8.2.133

Abstract

Economists have defined 'network externality' and have examined putative inframarginal market failures associated with it. This paper distinguishes between network effects and network externalities, where the latter are market failures. The authors argue that while network effects are important, network externalities are theoretically fragile and empirically undocumented. Some network externalities are merely pecuniary. Network ownership or transactions among network participants can internalize some network effects. The type of market failure that has been associated with these externalities is a transition problem that has little to do with externality.

Article Full-Text Access

Full-text Article (Complimentary)

Authors

Liebowitz, S. J. (U TX, Dallas)
Margolis, Stephen E. (NC State U)

JEL Classifications

L11: Production, Pricing, and Market Structure; Size Distribution of Firms
L23: Organization of Production
L13: Oligopoly and Other Imperfect Markets

Comments

View Comments on This Article (0) | Login to post a comment


Journal of Economic Perspectives


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

JEP - All Issues

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us