Defining strategies to win in the Internet market

Physica A: Statistical Mechanics and its Applications, 2010

The dynamic behavior of a multiagent system in which the agent size s i is variable it is studied along a Lotka-Volterra approach. The agent size has hereby for meaning the fraction of a given market that an agent is able to capture (market share). A Lotka-Volterra system of equations for prey-predator problems is considered, the competition factor being related to the difference in size between the agents in a oneon-one competition. This mechanism introduces a natural self-organized dynamic competition among agents. In the competition factor, a parameter σ is introduced for scaling the intensity of agent size similarity, which varies in each iteration cycle. The fixed points of this system are analytically found and their stability analyzed for small systems (with n = 5 agents). We have found that different scenarios are possible, from chaotic to non-chaotic motion with cluster formation as function of the σ parameter and depending on the initial conditions imposed to the system. The present contribution aim is to show how a realistic though minimalist nonlinear dynamics model can be used to describe market competition (companies, brokers, decision makers) among other opinion maker communities.

European Economic Review, 2001

We examine a price competition game between two intermediaries offering to match two sides of a market on the Internet. Competition is characterized by asymmetric network externalities.We account for some specificities of cybermediation, in particular access vs usage pricing and the possibility of using the services of several intermediaries. When only registration fees are used and agents register with at most one cybermediary, there exists an equilibrium where one firm corners the market with positive profits. Introducing either fees that are contingent on successful matching or the possibility of registration with two cybermediaries cancels the profit for equilibria where only one cybermediary receives all the demand. Other types of equilibria are discussed.

1999

In this paper, we analyze the e ects of brand loyalty and network e ects on the fortunes of Internet companies in an agent-based model. We nd that brand loyalty and network e ects produce interesting dynamics when included together in a simulated Internet which are very di erent from the dynamics observed when only one or neither of these e ects are present. If both brand loyalty and social communication are high, a loyal user can beconvinced to switch web sites, thus causing large and traumatic changes in the fortunes of the Internet companies.

DANUBE

Various internet platforms have rapidly developed into central points of everyday life, for private individuals as well as for companies (often dominated by a single or a few companies). At the same time these internet platforms are advancing into more and more areas of business. This creates the risk of dependency, abuse of power, manipulation, concentration of power, centralization of data and information with corresponding effects on technological development, innovation, economy, society and politics. From an economic point of view, this article examines how the strong market positions of internet platforms arise and can be maintained. The dynamics of these technology and innovation-driven markets and the differences from conventional markets are also discussed. These internet markets have emerged from a series of innovations and are characterized by rapid technological development. Taking into account the economic peculiarities as well as knowledge from innovation and governanc...

2002

In this paper, we study the local dial-up Internet access market using a game theoretic model. In particular, we consider the Nash equilibrium of the service providers and examine their behavior on investment and output level. We calibrate this model to fit the industry structure and data found in rural markets. In the first part of the paper, we examine the Internet industry structure and its characteristics.

International Journal of Industrial Organization, 2001

Search engines hold the key to helping consumers access the wealth of information on the web. In this paper I examine the evolution of and competition in the internet search engine market. The goal of my analysis is to examine whether early entrants benefit in the long-run from their first-mover position in internet markets. I find that while early entrants (Yahoo, Lycos, Excite, Infoseek, and Altavista) still have an advantage, the pure "brand effect" advantage has been declining over time. Yahoo has maintained its leadership position by providing a superior product. The success of a wave of recent new entrants suggests that entry barriers are still quite low in the internet search engine market. __________________________ I am grateful to Paul Geroski, Shane Greenstein, Jose Mata for many helpful suggestions and comments.

Computers in Industry, 2013

This paper describes the cross-border competition between two of the largest free Internet content providers in China through the use of multi-agent technology. Case studies are conducted for both TENCENT and Qihoo 360, with their customers being simulated as agents in a model for products selection. The result of different competition strategies of the two enterprises is obtained from the virtual market. The results indicate that cross-border competition is unable to improve the market share of the two leading Internet content providers. The findings suggest that keeping one of the three proposed Nash equilibriums is the recommended strategy for companies involved in cross-border competition.

1994

The Internet is by far the fastest growing economy in the world in terms of the number of users and information providers. Currently there are over 30 million users with an estimated 100% annual growth. As an economic system we can view the information providers, including entertainment, news, educational services, etc., as producers and the users as consumers. The Internet is already experiencing traffic jams and, given the growth rate of The Internet and the need to provide real time services in future, this will become a severe problem if proper coordinating mechanisms are not designed and implemented. We have developed a priority pricing mechanism based on General Equilibrium theory in economics, and we use a measure based on the collective benefits obtained by the users to evaluate the performance of the system. We have developed simulation model to test the validity of our approach and to show the gain in efficiency induced by pricing. We present some results with a non-priority pricing scheme and show substantial improvements versus a free access policy. Furthermore, we address the issues concerning the development of new accounting/billing methods, cross subsidization of services, infrastructure investment, development of smart agents for dynamic scheduling and users' job management, and the possible competitive market structures which will evolve over The Internet.

Physical review letters, 2005

We model the evolution of the Internet at the Autonomous System level as a process of competition for users and adaptation of bandwidth capability. We find the exponent of the degree distribution as a simple function of the growth rates of the number of autonomous systems and the total number of connections in the Internet, both empirically measurable quantities. This fact place our model apart from others in which this exponent depends on parameters that need to be adjusted in a model dependent way. Our approach also accounts for a high level of clustering as well as degree-degree correlations, both with the same hierarchical structure present in the real Internet. Further, it also highlights the interplay between bandwidth, connectivity and traffic of the network.

SSRN Electronic Journal, 2016

In this paper we examine the impact of a web aggregator on firms and consumers in a horizontally differentiated market. When a firm pays a fee to be listed on the aggregator's website, its location and price become observable to e-users (consumers who visit the website). We consider two settings, depending on the possibility for online firms to offer discounts to e-users. In equilibrium, not all firms will go online -some will choose to remain offline. Online firms attract more customers due to the higher level of information, but face a tougher price competition. When the proportion of e-users is relatively low, price discrimination may hurt the firms. Therefore, less of them can afford to go online. The opposite holds when e-users predominate; price discrimination yields a higher number of online firms than uniform pricing. Finally, we evaluate the aggregator's optimal policy regarding the fee and whether to impose uniform pricing or to allow price discrimination. We discover that, unless the proportion of e-users is relatively low, the aggregator induces only a few firms to go online.