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Modelling the growth of the network value

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  • Scala, Antonio
  • Delmastro, Marco

Abstract

We investigate the evolution of network effects, specifically focusing on the emerging paradigm of third-generation networks known as group-forming networks (GFNs). In contrast to traditional views where network value adheres to Metcalfe’s quadratic growth or Sarnoff’s linear growth, GFNs, such as social networks and community-centric platforms like Apple, Microsoft, and Google, exhibit a distinct exponential growth pattern in network value as postulated by Reed’s hypothesis.

Suggested Citation

  • Scala, Antonio & Delmastro, Marco, 2024. "Modelling the growth of the network value," Chaos, Solitons & Fractals, Elsevier, vol. 185(C).
    • Handle: RePEc:eee:chsofr:v:185:y:2024:i:c:s0960077924006854
    DOI: 10.1016/j.chaos.2024.115133
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    References listed on IDEAS

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    1. Jeffrey Rohlfs, 1974. "A Theory of Interdependent Demand for a Communications Service," Bell Journal of Economics, The RAND Corporation, vol. 5(1), pages 16-37, Spring.
    2. Windrum, Paul & Swann, Peter, 1999. "Networks, Noise and Navigation: Sustaining Metcalfe’s Law through Technological Innovation," Research Memorandum 009, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
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