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KW Q = AK α W β q = a + α k + βw q = log Q, k = log K, w = logw

i P ij v ij P ij = exp( vij ), J exp( v ) k= 1 ik v i j = X β αp + γnu j j j j X j j p j j NU j j NU j

( ) ( ) i j P ij P ij P ij = J exp( vij ) v exp( v ) k= 1 ik ij = α ln( speed ) + βp ij ij j=

v ij i j i j P ij j speed ij p ij i v ik p ik k j speed ij i j i i v ij

p ij i j i i ε own ε 53 k ε own k j ε cross cross ε ε own cross dpk pk = = pk β ( 1 Sharek ) dp P k dp k p j k = = pk β dpk Pj Share k ε ε own cross k j

ε own ε cross εown ε own ε cross ε cross ε own

cross ε cross ε

g g Narrow Broad i j P ij i g P i,g g i j P i,j g λg exp ( ν ij λ ) g j g exp ( ν ij λg ) Pig =, P = λ j g g i, G exp( ν ik λ ) g exp( ν ik λ ) g k g g= 1 k g v ij = c + α ln( speed ) + βp + γ j ij ij j income i j=

σ g =1-λ g g λ g σ g σ g

σ g

Amemiya, Takashi (1985), Advanced Econometrics, Boston, Mass.: Harvard University Press. Brynjolfsson, Erik and Chris F. Kemerer (1996), Network Externalities in Microcomputer Software: An Econometric Analysis of the Spreadsheet Market, Management Science, Vol.42, pp.1627-1647. Crandall, Robert, Gregory Sidak, and Hal Singer (2002), The Empirical Case Against Asymmetric Regulation of Broadband Internet Access, Berkeley Technology Law Journal, Vol.17, pp.953-987. Farrell, Joseph and Paul Klemperer (2002), Coordination and Lock-In: Competition with Switching Costs and Network Effects, unpublished manuscript, available from http://www.nuff.ox.ac.uk/users/klemperer/lockinupdated.pdf. Gandal, Neil (1994), Hedonic Price Indexes for Spreadsheets and an Empirical Test of the Network Externalities Hypothesis, RAND Journal of Economics, Vol.25, pp.160-170. Katz, Michael L. and Carl Shapiro (1994), Systems Competition and Network Effects, Journal of Economic Perspectives, Vol.8, pp.93-115. Klemperer, Paul (1995), "Competition when Consumers have Switching Costs," Review of Economic Studies, Vol.62, pp.515-539. McFadden, Daniel (1974), Conditional Logit Analysis of Qualitative Choice Behavior, Chapter 4 in Frontiers in Econometrics edited by Paul Zarembka, New York: Academic Press, pp.105-142. Ohashi, Hiroshi (2003), The Role of Network Effects in the U.S. VCR Market, 1978-86, Journal of Economics and Management Strategy, Vol.12, pp.447-494. Park, Sangin (2003), Quantitative Analysis of Network Externalities in Systems Competition: the VCR Case, unpublished manuscript, available from http://ms.cc.sunysb.edu/~sanpark/wrkps.html. Rappoport, Paul, D. J. Kridel, L. D. Taylor, and J. Allleman (2001), Residential Demand for Access to the Internet, University of Arizona, Working paper. Rohlfs, Jeffrey H. (1974), A Theory of Interdependent Demand for Communication Service, Bell Journal of Economics, Vol.5, pp.16-37. Rysman, Marc (2003), Competition between Networks: A Study of the Market for Yellow Pages, forthcoming in Review of Economic Studies. Tanaka, Tatsuo and Reiko Murakami (2003), Network Externalities in the Japanese Market of Routers, Discussion Paper CPDP1-E, Competition Policy Research Center, Fair Trade Commission of Japan.

Yasaki, Yoshihito and Reiko Murakami (2003), Network Effects in the Japanese Word-Processing Software Market, Discussion Paper CPDP2-E, Competition Policy Research Center, Fair Trade Commission of Japan. (http://www2.jftc.go.jp/cprc/030902ne.pdf)

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