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Adoption of Bundled Services with Network Externalities and Correlated Affinities

Published:28 October 2014Publication History
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Abstract

The goal of this article is to develop a principled understanding of when it is beneficial to bundle technologies or services whose value is heavily dependent on the size of their user base, that is, exhibits positive exernalities. Of interest is how the joint distribution, and in particular the correlation, of the values users assign to components of a bundle affect its odds of success. The results offer insight and guidelines for deciding when bundling new Internet technologies or services can help improve their overall adoption. In particular, successful outcomes appear to require a minimum level of value correlation.

Categories and Subject Descriptors (2012): Networks -- Network Algorithms -- Network economics; Networks -- Network properties -- Network dynamics; Information systems -- Information systems applications -- Collaborative and social computing systems and tools; Security and privacy -- Human and societal aspects of security and privacy; Human-centered computing -- Collaborative and social computing theory, concepts and paradigms

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            • Published in

              cover image ACM Transactions on Internet Technology
              ACM Transactions on Internet Technology  Volume 14, Issue 2-3
              Special Issue on Pricing and Incentives in Networks and Systems and Regular Papers
              October 2014
              287 pages
              ISSN:1533-5399
              EISSN:1557-6051
              DOI:10.1145/2684804
              Issue’s Table of Contents

              Copyright © 2014 ACM

              Publisher

              Association for Computing Machinery

              New York, NY, United States

              Publication History

              • Published: 28 October 2014
              • Accepted: 1 June 2014
              • Revised: 1 March 2014
              • Received: 1 September 2013
              Published in toit Volume 14, Issue 2-3

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