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Summary mandatory literature Digital Entrepreneurship Project (DEP) ()
These are summaries of the mandatory literature/articles of the course Digital Entrepreneurship Project (DEP) for .
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Summaries mandatory literature DEP (2019-2020)Economides, N. (1996). “The economics of networks”, International journal of
industrial organization, 14(6), 673–699. Elsevier. doi:10.1016/0167-7187(96)01015-6
Varian, Hal R.(2003), “Economics of Information Technology”, http://
www.sims.berkeley.edu/~hal/Papers/mattioli/mattioli.pdf
Enders, A., Hungenberg, H., Denker, H., & S. (2008), “The long tail of social networking.
Revenue models of social networking sites”. European Management Journal, 26(3),
199-211. doi:10.1016/j.emj.2008.02.002
Amit, R, and C Zott. “Value creation in e-business.” Strategic Management Journal.
Strat. Mgmt. J., 22: 493–520 (2001) http://www.uazuay.edu.ec/bibliotecas/e-
business/ Value_Creation_in_E-Business.pdf
Noe, T., & Parker, G. (2005). “Winner Take All: Competition, Strategy, and the Structure
of Returns in the Internet Economy.” Journal of Economics & Management Strategy,
14(1), 141-164. doi:10.1111/j.1430-9134.2005.00037.x
Casadesus-Masanell, R., & Ricart, J. E. (2010). “From Strategy to Business Models and
onto Tactics”, Long Range Planning, 43(2-3), 195-215. doi:10.1016/j.lrp.2010.01.004
Teece, D. J. (2010). “Business Models , Business Strategy and Innovation. Long Range
Planning”, 43, 172-194. doi:10.1016/j.lrp.2009.07.003
Wirtz, B. W., Pistoia, A., Ullrich, S., & Göttel, V. (2015). “Business Models: Origin,
Development and Future Research Perspectives”, Long Range Planning,
https://doi.org/ 10.1016/j.lrp.2015.04.001
Amit, R., & Zott, C. (2010). “Business Model Innovation: Creating Value in Times of
Change” (No. WP-870) (Vol. 3). Barcelona. Retrieved from http://dx.doi.org/10.2139/
ssrn.1701660
Brousseau, E., & Penard, T. (2007). “The Economics of Digital Business Models: A
Framework for Analyzing the Economics of Platforms”, Review of Network Economics,
6(2), 81-114. http://ssrn.com/abstract=1086370
Blank, S. (2013). “Why the LeanStart-Up Changes Everything”. Harvard Business
Review, 2013(May), 1–9. http://web.b.ebscohost.com/ehost/pdfviewer/pdfviewer?
vid=2&sid=53c8d054-01d8-4b19-9108-4381982fd6e7%40sessionmgr111&hid=102
,Veronika Gustafsson, Mohammad Saud Khan,“Monetising blogs: Enterprising
behaviour, co-creation of opportunities and social media entrepreneurship”, Journal
of Business Venturing Insights, Volume 7, 2017, Pages 26-31, ISSN 2352-6734, http://
www.sciencedirect.com/science/article/pii/S2352673416300543
Helen Perks, Christian Kowalkowski, Lars Witell, Anders Gustafsson, “Network
orchestration for value platform development”, Industrial Marketing Management,
Volume 67, 2017, Pages 106-121, ISSN 0019-8501, https://doi.org/10.1016/
j.indmarman.2017.08.002.
Daniel Thomé de Oliveira, Marcelo Nogueira Cortimiglia, “Value co-creation in
webbased multisided platforms: A conceptual framework and implications for business
model design”, Business Horizons, Volume 60, Issue 6, 2017, Pages 747-758, ISSN 0007-
6813, https://doi.org/10.1016/j.bushor.2017.07.002.
Skok, D. (2020, April 16). SaaS Metrics 2.0 – A Guide to Measuring and Improving what
Matters. Retrieved from https://www.forentrepreneurs.com/saas-metrics-2/
Christian Nielsen, Morten Lund, “ Building scalable business models”, MIT Sloan
Management review, Winter 2018, Vol. 59, No. 2 http://mitsmr.com/2ACDRll`
Yuki Inoue, Masaharu Tsujimoto, “New market development of platform ecosystems:
A case study of the Nintendo Wii”, Technological Forecasting and Social Change, 2017,
ISSN 0040-1625, https://doi.org/10.1016/j.techfore.2017.01.017
Janz, C. (2014, October 5). Five ways to build a $100 million business. Retrieved from
https://christophjanz.blogspot.com/2014/10/five-ways-to-build-100-million-
business.html
Zider B., “How Venture Capital Works”, Harvard Business Review. 1998;28(2):131-139.
Sahlman W., “How to write a great business plan”, Harvard Business Press; 2008.
Rich S, Gumpert D. “How to write a winning business plan”, Harvard Business Review.
1985;3:3–8.
, The economics of networks
Economides (1996)
Classification of networks
Networks are composed of links that connect nodes. A typical features of networks is that they provide
substitutes made of complements. Nodes are combinable to produce demanded goods. Network
types:
Information superhighway network: for services with close substitutes for each of the
components (transmission can be done through a cable or wireless);
Star telephone network: a connection between A and B is composed of AS, BS, and switching
services at S. Here the complementarity between pieces of the network is crucial. In two-way
networks, AB and BA are distinct (e.g. roads, railways). In one-way networks, either AB or BA
is unfeasible or does not make sense (e.g. broadcasting);
Long-distance network: a two-way telephone network.
Vertically related markets: providers of vertically related goods can make their products
incompatible with components of other firms by not adhering to specific technical
compatibility standards.
Network externalities
A positive consumption externality (or network externality) means that the value of a unit increases
with the number of units sold. A key reason for this is the complementarity between network
components. Externalities can be:
Direct: customers are identified with components (a two-way telephone network);
Indirect: in typical one-way networks (vertically related markets). These exist either by
exchanging goods or by vertically related services with a financial transaction.
Two approaches for analysing network externalities:
Macro approach: attempt to model their consequences;
Micro approach: attempt to find the root cause of network externalities.
Macro approach
Perfect competition: network externalities arise out of the complementarity of different
network pieces. The value of good X increases as more of the complementary good Y is sold.
Perfect competition is inefficient since the social benefit of network expansion is larger than
the benefit of a particular firm. Perfect competition provides a smaller network than optimal;
Monopoly: a monopolist has influence on the expectations of the consumers which drives him
to higher production. However, the profit-maximization leads to lower production levels than
perfect competition (lower total surplus);
Oligopoly (compatibility): every oligopolist takes the output of all others as given and sets the
expectation of consumers of his own output. In this way, oligopolists support a network size
between monopoly and perfect competition;
Oligopoly (incompatibility): every firm adheres to its own unique standard. If the costs of
achieving compatibility are lower than the increase in profits, then compatibility is socially
beneficial. However, the cost of achieving compatibility might be larger than the increase in
profits for some firms, while these costs are lower than the increase in total surplus. Profit
maximizing firms will not achieve industry-wide compatibility while this is optimal.
If standardization costs are different per firm, firms play a standards coordination game in which firm
1 has higher profits when its standard is adopted. In case of disagreement, profit depends on the
industry and will be lower than those of either firms’ standard.
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