Network Centrality and Device Ecosystems

Doh-Shin Jeon, Yassine Lefouili, Yaxin Li and Timothy Simcoe

No 23-1468, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We develop a model of a device ecosystem to study how network structure affects demand, pricing, and output for the underlying products. Prices depend on each device's Katz-Bonacich centrality in a network defined by the demand-side externalities linking devices. We show how the relevant network differs for an ecosystem monopolist, a social planner, a regulator that sets Ramsey prices, or a "decentralized'' ecosystem where devices sell at marginal cost. Finally, we extend our baseline model by adding complementary goods and allowing for imperfect competition among downstream device producers.

Keywords: Ecosystem; Multi-sided Market; Network; Centrality (search for similar items in EconPapers)
JEL-codes: D21 D42 D85 L12 (search for similar items in EconPapers)
Date: 2023-09-13, Revised 2025-01
New Economics Papers: this item is included in nep-com, nep-gth, nep-mic, nep-net and nep-reg
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Related works:
Working Paper: Network Centrality and Device Ecosystems (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:128468

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