Policy for Networks, Services, Digital Goods

Abstract

Data networks are necessary to have access to digital goods and IT services. Different types of networks (fixed line, mobile, etc.) are described in Sect. 2.3.1. Macroeconomic consequences of a spread of networks are described by themodel in Chap. 4. The basic model of network economics which emphasises network effects on the demand side is presented in Sect. 3.1.1. A combination of network effects, lock-in effects, sunk costs, economies of scale and scope may lead to a monopolization of network supply. Different kinds of networks (energy, telephone, water, etc.) are also labeled as “natural monopolies” in standard microeconomic theory because of continuously-falling average costs when demand increases.