Classroom Companion: Business

N–Z
United Nations (UN) 5
User Datagram Protocol (UDP) 52, 141
V
Value 6, 8, 12, 13, 47, 49, 53, 54, 68, 74, 75, 86, 
104, 105, 107–111, 114, 120, 124, 125, 127, 
132, 135–145, 150–152, 160, 162, 200, 211, 
212, 237, 239, 250, 266, 282–295, 297, 299, 
301, 302
– chain 104–106, 111, 114, 120, 284, 302
– generation 285
– network 54, 104, 108–111, 120, 151, 160, 250, 
284, 302
– proposition 47, 75, 286–293, 295, 297, 299, 
301
– shop 104, 107, 120
Video cassette recorder (VCR) 169, 199
Video home system 169, 199
Virtual network operator 68, 198, 252
– mobile 71
Virtualization 52
Voice-over-IP 86, 253, 254
Vortex 76
W
WeChat 118, 253, 254
WhatsApp 118, 211, 212, 254
WiFi 24, 25, 86–88, 93, 251
Wikimedia Foundation 298
Wikipedia 24, 74, 81, 82, 94, 138, 145, 146, 235, 
245, 289, 290, 297–298, 301, 304, 331
World of Warcraft 13, 82, 131, 145, 146, 254, 
271, 284, 290–292
World Wide Web (WWW) 19, 20, 24, 51,
93, 245
Y
YouTube 10, 24, 131, 132, 145, 146, 187, 198, 
211, 254, 325
Z
Zero ARPU 83, 290, 296
Zero marginal cost 13, 54, 74, 78, 83, 84, 86, 
106, 110, 232, 234, 254, 290
Zipf's law 236, 237
Index

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Document Outline

• Foreword
• Preface
• About this Book
• Contents
• About the Authors
• Abbreviations
• 1: The Digital Economy
  • 1.1 Introduction
  • 1.2 Definitions
  • 1.3 Digitization of the Economy
  • 1.4 Digital Economics
  • 1.5 Conclusions
  • References
    • Further Reading
• 2: Information and Communication Technologies
  • 2.1 Introduction
    • Box 2.1 The Transistor
  • 2.2 Timeline for the ICT Evolution
    • Box 2.2 The ARPANET
    • Box 2.3 Family Tree of Mobile Networks
  • 2.3 Factors Constraining Evolution
    • Box 2.4 Cryptocurrencies
  • 2.4 Internet of Things
  • 2.5 Conclusions
  • References
    • Further Reading
• 3: Convergence of Technologies and Services
  • 3.1 Dedicated Networks
  • 3.2 Early Attempts of Service Integration
  • 3.3 Service Integration over the Internet
  • 3.4 Toward Next-Generation Network
    • IP in the Sky
  • 3.5 Conclusions
  • References
• 4: Digital Economy Ecosystem
  • 4.1 Ecosystem Metaphor
    • Box 4.1 Illustration of the Vulnerability of a Biological Ecosystem
  • 4.2 Ecosystem Components
  • 4.3 The Layered Internet as Ecosystem Component
    • Box 4.2 Skype and Over-the-Top Services
  • 4.4 Computer Infrastructure and Platforms as Ecosystem Components
  • 4.5 Applications and Content as Ecosystem Component
  • 4.6 Consumers as Ecosystem Component
  • 4.7 Authorities as Ecosystem Components
  • 4.8 Conclusions
  • References
• 5: Digital Market Evolution
  • 5.1 Telecommunications as Natural Monopoly
  • 5.2 De-monopolization of User Equipment
  • 5.3 De-monopolization of Mobile Network Operations
    • Box 5.1 Competitive Dilemma
  • 5.4 De-monopolization of All Telecommunications Operations
  • 5.5 Resellers and Virtual Network Operators
  • 5.6 Conclusions
  • References
• 6: Digital Goods and Services
  • 6.1 Definitions
    • Box 6.1 Anything as a Service
    • Box 6.2 E-Banking
  • 6.2 Zero Marginal Cost
  • 6.3 Classification of Digital Goods
  • 6.4 Zero Average Revenue per User
    • Box 6.3 Facebook and ARPU = 0
  • 6.5 Digital Commodities
  • 6.6 Transaction Costs
  • 6.7 Bundling
  • 6.8 Conclusions
  • References
    • Further Reading
• 7: Production Models
  • 7.1 Physical and Digital Products
  • 7.2 Basic Production Methods
    • 7.2.1 In-House Production
    • 7.2.2 Commons-Based Peer Production
    • 7.2.3 Crowdsourcing
  • 7.3 Production Tools
    • 7.3.1 Crowdfunding
    • 7.3.2 Peer-to-Peer Lending
    • 7.3.3 Free and Open-Source Software and Cloud Computing
  • 7.4 Conclusions
  • References
    • Further Reading
• 8: Value Creation Models and Competitive Strategy
  • 8.1 Introduction
  • 8.2 Value Chain
  • 8.3 Value Shop
  • 8.4 Value Network
  • 8.5 Competitive Forces
    • 8.5.1 Porter’s Five Forces
    • 8.5.2 Porter’s Five Forces Applied to the Digital Economy
  • 8.6 Competition, Cooperation, and Coopetition
  • 8.7 Conclusions
  • References
    • Further Reading
• 9: Network Effects
  • 9.1 Introduction
    • Box 9.1 Six Degrees of Separation
    • Box 9.2 Dunbar’s Number
  • 9.2 Positive and Negative Network Effects
  • 9.3 Characteristics of Network Effects
  • 9.4 Direct and Indirect Network Effects
  • 9.5 Same-Side and Cross-Side Network Effects
  • 9.6 Estimating the Value of Networks
    • 9.6.1 Size of Networks
    • 9.6.2 Sarnoff’s Law
    • 9.6.3 Metcalfe’s Law and Odlyzko-Tilly’s Law
      • Box 9.4 Derivation of Odlyzko-Tilly’s Law
    • 9.6.4 Reed’s Law
      • Box 9.5 Derivation of the Modified Law
    • 9.6.5 Summary and Comparison of Network Laws
  • 9.7 Conclusions
  • References
    • Further Reading
• 10: Multisided Platforms
  • 10.1 Introduction
  • 10.2 Characteristics of Multisided Platforms
    • 10.2.1 Network Effects
    • 10.2.2 Pricing
    • 10.2.3 Competition
    • 10.2.4 Business Ecosystem
    • 10.2.5 Market Regulations
  • 10.3 Network Effects and MSPs
  • 10.4 Business Ecosystem and MSPs
  • 10.5 Trade Process of MSPs and Resellers
  • 10.6 Conclusions
  • References
• 11: Path Dependence
  • 11.1 Definitions
  • 11.2 Competition and Path Dependence
  • Case Study 11.1 Videotape Format War
  • 11.3 Impact of Churning
  • Box 11.1 Mathematical Model for the Temporal Evolution of Markets with Churning
  • 11.4 Path Dependence and Lock-In
  • Case Study 11.2 Facebook vs Myspace
  • 11.5 Conclusions
  • References
    • Further Reading
• 12: Lock-In and Switching Costs
  • 12.1 Introduction
  • 12.2 Switching Costs
  • 12.3 Lock-In Mechanisms
    • 12.3.1 Spare Parts, System Updates, and Maintenance
    • 12.3.2 Training
    • 12.3.3 Incompatibility and Compatibility
    • 12.3.4 Potential Loss of Information
    • 12.3.5 Investments and Economic Lifetime
    • 12.3.6 Difficult-to-Terminate Contracts
    • 12.3.7 Loyalty Programs
    • 12.3.8 Bundling
    • 12.3.9 Search Algorithms
    • 12.3.10 Product Tying
  • 12.4 Lock-In Cycle
  • 12.5 Network Effects and Lock-In Cycle
  • 12.6 Lock-In and Market Regulations
  • 12.7 Conclusions
  • References
    • Further Reading
• 13: Digital Monopolies and Oligopolies
  • 13.1 Definition of Market Types
  • 13.2 Formation of Monopolies
  • Case Study 13.1 Creation of a Monopoly: Facebook
  • 13.3 Formation of Oligopolies
  • Case Study 13.2 The Mobile App Duopoly
  • 13.4 Conclusions
  • References
• 14: Mergers and Acquisitions
  • 14.1 Definitions
  • 14.2 Motivations for M&A
  • 14.3 Types of Integration
  • 14.4 Conclusions
  • References
• 15: Standards
  • 15.1 Why Standards?
  • 15.2 Standards Organizations
    • 15.2.1 ITU
    • 15.2.2 ETSI
    • 15.2.3 3GPP
    • Box 15.1 From GSM to 5G
    • 15.2.4 Internet Society
    • 15.2.5 World Wide Web Consortium
    • 15.2.6 Institute of Electrical and Electronics Engineers (IEEE)
  • 15.3 Market Implications of Standards
  • 15.4 Standards and Interconnectivity, Interoperability, and Backward Compatibility
  • 15.5 Standards for Trust and Security
  • 15.6 Conclusions
  • Reference
• 16: The Long Tail
  • 16.1 Origin of the Concept: Amazon and the Long Tail
  • 16.2 Internet and the Long Tail
  • 16.3 Numerical Analysis of the Long Tail
  • Box 16.1 Zipf’s Law
  • Box 16.2 Generalization of Zipf’s Law
  • Box 16.3 The Long Tail and the Vulnerability of Internet
  • 16.4 Conclusions
  • References
    • Further Reading
• 17: Digital Markets
  • 17.1 Market Types
  • 17.2 Stakeholders and Relationships in Digital Markets
  • 17.3 E-Commerce Markets
  • 17.4 Network Access Markets
  • 17.5 Information Service Markets
  • 17.6 Conclusions
  • References
    • Further Reading
• 18: Digital Market Modeling
  • 18.1 Introduction
  • 18.2 Bass Diffusion Model
  • Box 18.1 Solution of the Bass Equation
  • Box 18.2 Finding the Inflexion Point
  • 18.3 Model for Markets with Competition and Churning
  • Box 18.3 Market Stability and Churning
  • 18.4 Models for Massive Multiplayer Online Games
  • Box 18.4 The SIR Model
  • 18.5 Analysis of Real Markets
  • Box 18.5 System Dynamic Models
  • 18.6 Conclusions
  • References
• 19: Digital Business Models
  • 19.1 Modeling Concepts
  • 19.2 The Business Model Canvas
  • 19.3 The Stakeholder Relationship Model
  • 19.4 Digital Business Models
  • Case Study 19.1 World of Warcraft
  • Case Study 19.2 Spotify
  • Case Study 19.3 Facebook
  • Case Study 19.4 Wikipedia
  • Case Study 19.5 Airbnb
  • 19.5 Conclusions
  • References
    • Further Reading
• 20: Big Data Economics
  • 20.1 Zettabyte Era
    • 20.1.1 Generation
    • 20.1.2 Processing
    • 20.1.3 Distribution
    • 20.1.4 Storage
  • Box 20.1 Artificial Intelligence, Machine Learning, Expert Systems, and Data ­Mining
  • 20.2 Characteristics of Big Data
  • Box 20.2 The Lefdal Mine Datacenter
  • 20.3 Use of Big Data
    • 20.3.1 Marketing
    • 20.3.2 Health Care
    • 20.3.3 Algorithmic Financial Trading
    • 20.3.4 Government and Public Services
    • 20.3.5 Insurance
    • 20.3.6 Retailers
    • 20.3.7 Data Brokers
    • 20.3.8 Electronic Media
    • 20.3.9 Science
    • 20.3.10 Data Illiteracy
  • Box 20.3 Netflix and Big Data
  • 20.4 Abuse of Big Data
    • 20.4.1 Clandestine Operations
    • Box 20.4 Metadata, Content, and Privacy
    • 20.4.2 Social Control
    • 20.4.3 Tracking People
    • 20.4.4 Violation of Personal Integrity
  • 20.5 Conclusions
  • References
    • Further Reading
• 21: Net Neutrality
  • 21.1 Basic Net Neutrality
  • 21.2 5G and Net Neutrality
  • 21.3 Device and Search Neutrality
  • 21.4 Business Implications of Net Neutrality
  • 21.5 Zero-Rating
  • 21.6 Conclusions
  • References
• 22: Digital Regulation
  • 22.1 Introduction
  • 22.2 Mobile Network Regulations
    • 22.2.1 Fair Competition
    • 22.2.2 Denial of Interconnection
    • 22.2.3 Excessive Pricing
    • 22.2.4 Cross-Subsidizing
    • 22.2.5 Price Discrimination
    • 22.2.6 Lock-In of Customers
    • 22.2.7 Non-Price Discrimination
  • 22.3 Internet Regulations
  • 22.4 Lessig’s Four Modalities
  • 22.5 Conclusions
  • References
• Index