Falk von Westarp

Network Effects and Diffusion Theory: Network Analysis in Economics

In this paper, some of the main results of an interdisciplinary research project on standards are presented and integrated into a single framework of technology diffusion. Based on network effect theory and diffusion theory, we present an agent-based simulation model that extends the traditional economical network perspective by incorporating structural determinants of networks (centrality, topology/density) from sociology and geography and individual decision making on the part of prospective technology users under realistic informational assumptions. Based upon these models, decision behavior in terms of the selection of standards and the diffusion of technological innovations in networks can be described. The model has so far served as both a tool for developing and evaluating network strategies in practical application like EDI networks or corporate directory service planning as well as for providing theoretical insights into standardization problems and possible solutions.

From Qwerty to Nuclear Power Reactors: Historic Battles for the Standard

Key success factors in eleven historic standardization battles are discussed, among them the famous VHS versus Betamax, IBM vs. Apple or QWERTY vs. Dvorak’s keyboard design.

Vernetzung als Wettbewerbsfaktor am Beispiel der Region Rhein-Main

New information and communication networks - above all the Internet - offer new opportunities to gain significant competitive advantages for firms, people, public institutions, and regions. These networks are fundamental presuppositions of the emergence of new organization and cooperation structures. Thus traditional hierarchical structures are increasingly substituted by more flexible network organizations. At the same time networks lead to globalization of supply and demand and therefore to more competition. The research project intends to contribute to the development and application of an interdisciplinary theory of networking. Networking is defined as the process of finding and integrating partners. In this context technical, economic, social, political, regional, and legal aspects are considered.

Modeling Diffusion Processes in Networks

In this paper, some of the main results of the research project “Economics of Standards in Information Networks” are presented and integrated into a single framework of technology diffusion. We present an agent-based simulation model that incorporates structural determinants of networks (centrality, topology/density) and individual decision making on the part of prospective technology users under realistic informational assumptions. Based upon these models, decision behavior in terms of the selection of standards and the diffusion of technological innovations in networks can be described; the model can serve as a tool for developing and evaluating various internalization strategies that aim at answering questions like how to consider the determinants of an increasingly global and networked market when choosing corporate strategies.