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• W2292124564 abstract "Network externalities are among the most debated market phenomena of present days. Since Katz and Shapiro published their seminal paper in 1985,1 many authors have tried to measure the impact of such effects on the so-called ‘neoclassical’ analysis of the market, without reaching any established outcome. Network externalities have been defined as a ubiquitous, pantheistic entity;2 they have been taken as supply-side as well as demand-side effects, and have been associated with natural monopoly, essential facilities, learning effects, standardization and tipping. The remarkable rise of economists’ and lawyers’ attention to network effects is also due to the advent of the so-called ‘post-chicagoan’ approach to antitrust, whose more intense activism stems from the belief that these effects are likely to deviate the market away from its otherwise spontaneous efficiency path. According to this vein of antitrust analysis, network externalities may severely harm competition insofar as they strengthen the barriers protecting incumbent firms from new entrants. Many antitrust decisions of the last decade refer to the existence of network effects as a clue that a certain degree of intervention is needed, even though in most of these cases no solid evidence concerning their effective impact on the aggregate market equilibrium was brought about.3 As we hope to make clear in the following sections, the overwhelming majority of these decisions are based on a vague, nebulous interpretation of the concept here at stake, so as to end up in an embarrassing impasse. Some 15 years after Katz and Shapiro’s first hint, it still remains unclear whether network effects are really as ubiquitous – and by any means related to networks – as they have been credited. Moreover, be they actually widespread or not, it is equally unclear whether their existence alone involves any need for an antitrust inquiry. A closer analysis of the scenario where the phenomenon is supposed to manifest itself suggests a more cautious approach, aiming to revisit the whole subject from a different, more functional standpoint. Accordingly, this chapter attempts to provide an answer to a few, crucial questions that, in our opinion, still remain partially unsolved. First of all, do network externalities fit their" @default.
• W2292124564 created "2016-06-24" @default.
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• W2292124564 date "2002-12-18" @default.
• W2292124564 modified "2023-10-14" @default.
• W2292124564 title "How Safe is the King’s Throne? Network Externalities on Trial" @default.
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• W2292124564 doi "https://doi.org/10.4337/9781843760016.00017" @default.
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