Re: [EBIZ A1] L47/Xing Yueheng

[William Toh]

I'm not quite sure what your question is.  I'd assume you are asking whether network economics is good or bad for e-business?

I depends on who you are referring to.  To the consumer, network economics is good because it gives them more value.  For example, the standardisation of mobile services on GSM allows consumers to use their phones, regardless of the manufacturer, in any country.  This makes mobile communications more useful for consumers.  The GSM standard provides credibility and acceptance amongst consumers and ensures a large enough installed base of users to generate network and also supply-side economies for the telco industry.  In fact, network effects work primarily because it generates value for users of a product/service that goes beyond the specific features of the product/service.

On the other hand, network economics could also lead to less competition for suppliers as you pointed out.  Suppliers gain market power when they achieve network effects which cannot be readily duplicated by competitors who can only try to create competitive advantage by differentiating the specific features of their own product.  Network economics cannot be generated based on features alone.  Users may prefer to use an inferior product because they are locked-in with the incumbent, and switching costs are deemed to be too high.  In cases like Facebook, users may baulk at having to move or reinvite all their contacts to a new social network.

Less competition is obviously desirable for suppliers, but it reduces choice for consumers and leave consumers at the mercy of the incumbent suppliers.  So in this aspect, network economics benefit e-businesses, but not consumers. 

On Thu, Apr 12, 2018 at 7:43 PM, YueHeng Xing <johnny...@gmail.com> wrote:

Dear Mr Toh,

Thank you for the great efforts in marking my assignments. 

After attending the revision lecture by Dr Cordella, things have become clearer for the whole module. However, I have a question with regard to the network economics. 

As explained by Dr Cordella, the network economics has constituted to the decreasing competitiveness due to adhoc investments in eg. the feedback and review systems which reshape the whole competitive dynamic of the market. Nevertheless, is this considered a good thing or a bad thing? We all know that only in a more open and transparent market, people would get to understand and draw more information on price and quantity that could facilitate greatly when they acquire products and services. But in a less competitive market, barrier of entry would be built which indirectly causes customers to have limited choices, and which could cause them to be exploited opportunistically by the monopolizing firms. So in conclusion, which aspect of the network economics should we put more focus on given the situation that we are asked to perform analysis?

Thank you so much Mr Toh

Regard,

Johnny

On 10 April 2018 at 09:27, William Toh <engw...@gmail.com> wrote:

Outstanding effort.

On Wed, Oct 25, 2017 at 2:06 PM, YueHeng Xing <johnny...@gmail.com> wrote:

Dear Mr Toh,

Please kindly find the attachment for me assignment 1.

Warmest Regards,

Johnny Xing