Marshall W. Van Alstyne

Computational Social Science

A field is emerging that leverages the capacity to collect and analyze data at a scale that may reveal patterns of individual and group behaviors.

Two-Sided Network Effects: A Theory of Information Product Design

How can firms profitably give away free products? This paper provides a novel answer and articulates trade-offs in a space of information product design. We introduce a formal model of two-sided network externalities based in textbook economics-a mix of Katz and Shapiro network effects, price discrimination, and product differentiation. Externality-based complements, however, exploit a different mechanism than either tying or lock-in even as they help to explain many recent strategies such as those of firms selling operating systems, Internet browsers, games, music, and video. The model presented here argues for three simple but useful results. First, even in the absence of competition, a firm can rationally invest in a product it intends to give away into perpetuity. Second, we identify distinct markets for content providers and end consumers and show that either can be a candidate for a free good. Third, product coupling across markets can increase consumer welfare even as it increases firm profits. The model also generates testable hypotheses on the size and direction of network effects while offering insights to regulators seeking to apply antitrust law to network markets.

Life in the network: the coming age of computational social science

A field is emerging that leverages the capacity to collect and analyze data at a scale that may reveal patterns of individual and group behaviors.

The State of Network Organization: A Survey in Three Frameworks

This article reviews the literature on network organizations and interprets explanations for its behaviors in terms of established analytical principles. Tools from computer science, economics, and sociology give three markedly different interpretations of its core attributes but they also settle on a handful of common themes. The proposed benefits are a clarification of what it means for an organization to be network structured, a few insights into its origins, and a suggestion of where the boundaries to some of its different forms might lie.

The Diversity-Bandwidth Tradeoff

The authors propose that a trade-off between network diversity and communications bandwidth regulates access to novel information because a more diverse network structure increases novelty at a cost of reducing information flow. Received novelty then depends on whether (a) the information overlap is small enough, (b) alters’ topical knowledge is shallow enough, and (c) alters’ knowledge stocks refresh slowly enough to justify bridging structural holes. Social network and e-mail content from an executive recruiting firm show that bridging ties can actually offer less novelty for these reasons, suggesting that the strength of weak ties and structural holes depend on brokers’ information environments.

Global Village or Cyber-Balkans? Modeling and Measuring the Integration of Electronic Communities

Information technology can link geographically separated people and help them locate interesting or useful resources. These attributes have the potential to bridge gaps and unite communities. Paradoxically, they also have the potential to fragment interaction and divide groups. Advances in technology can make it easier for people to spend more time on special interests and to screen out unwanted contact. Geographic boundaries can thus be supplanted by boundaries on other dimensions. This paper formally defines a precise set of measures of information integration and develops a model of individual knowledge profiles and community affiliation. These factors suggest specific conditions under which improved access, search, and screening can either integrate or fragment interaction on various dimensions. As IT capabilities continue to improve, preferences--not geography or technology--become the key determinants of community boundaries.

The dark side of the sharing economy … and how to lighten it

Improving the sharing economy will require addressing myriad problems.

Innovation, openness & platform control

We examine how exercising control over a technology platform can increase profits and innovation. Benefits depend on using a platform as a governance mechanism to influence ecosystem parters. Results can inform innovation strategy, antitrust and intellectual property law, and management of competition.

Money models for MOOCs

Considering new business models for massive open online courses.

Why Information Should Influence Productivity

After offering a brief historical overview, this article presents a broad set of hypotheses in an effort to connect information to productivity. There are three contributions from this work. First, it distills observations from a diverse literature as prelude to exploring these theories empirically. Second, it applies two concrete models of information value, relating them to the economic definition of productivity, while considering how network structure influences information flow. Third, examples from an ongoing empirical study illustrate each hypothesis to give it practical significance. Interested readers may also test precise interpretations of these theories in an online simulation environment of networked societies.