Nicholas Economides
New York University, Stern School of Business - Economics, Faculty Member
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Network Industries, Antitrust (Law), Strategic Analysis of Markets, Standards, Security and Privacy, Tying and Bundling, and 15 moreIndustrial Organization, Payment Systems, Loyalty contracts, Telecommunications, Law And Economics (Economics), Structure and organization, Public PolicyStudies, Economics, Business, Vertical Integration, Maximal Differentiation, Efficient Component Pricing Rule, Complementary Goods, Education, and The Internet edit
Biographical Information: Married. Papers are cross-listed in the following subject categories: [N] = Network Economics
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Mr. Economides is a professor of economics at the Stern School of Business at New York University and the executive director of the Networks, Electronic Commerce, and Telecommunications Institute. His fields of specialization include... more
Mr. Economides is a professor of economics at the Stern School of Business at New York University and the executive director of the Networks, Electronic Commerce, and Telecommunications Institute. His fields of specialization include economics of networks and technical compatibility and standardization, as well as structure and organization of financial markets and payments systems. Previously,
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The chapter discusses the issue of a possible abolition of network neutrality and the introduction of paid prioritization by residential broadband access networks. In short-run analysis where bandwidth is fixed and in the absence of... more
The chapter discusses the issue of a possible abolition of network neutrality and the introduction of paid prioritization by residential broadband access networks. In short-run analysis where bandwidth is fixed and in the absence of congestion, network neutrality tends to maximize total surplus. When an ISP violates network neutrality and invests the extra profits to bandwidth expansion, the presence of more bandwidth alleviates the allocative distortion, and can even reverse it. The chapter discusses the network neutrality issue under the assumption of congestion, and characterizes the set of utility functions for which network neutrality is optimal, as well as utility functions where it is optimal to prioritize. The chapter also reviews regulatory rules in the United States on network neutrality.
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A parimutuel market microstructure for contingent claims trading is proposed and analyzed. A parimutuel microstructure is a call auction where relative equilibrium prices of contingent claims are endogenously determined using a specific... more
A parimutuel market microstructure for contingent claims trading is proposed and analyzed. A parimutuel microstructure is a call auction where relative equilibrium prices of contingent claims are endogenously determined using a specific mechanism. We propose a market microstructure incorporating parimutuel principles which provides for notional derivatives transactions, limit orders, and bundling of contingent claims across states. This microstructure will be used by Longitude Inc.'s clients to transact derivatives on economic statistics, weather, insurance losses and other types of risks. JPMorgan Chase and Deutsche Bank are some of the f'mancial institutions that will be holding parimutuel auctions in early 2002.
ttached commodity, and is exclusively protected against infringement. Similarly, the law allows a tradename to be registered and used exclusively by a business entity. Legal protection of trademarks is granted with respect to specified... more
ttached commodity, and is exclusively protected against infringement. Similarly, the law allows a tradename to be registered and used exclusively by a business entity. Legal protection of trademarks is granted with respect to specified and related goods and does not extend to all products. For example, the trademark FORD owned by the automobile manufacturer does not cover unrelated items, say clothing. Thus, the same (or similar) trademark can be used by different owners in different product categories. Trademarks qualify for legal protection immediately upon use when they are "inherently distinctive." For marks that are not "inherently distinctive," the owner must establish a "secondary meaning" or "acquired distinctiveness" to receive legal trademark protection. Inherently distinctive trademarks fall into three types, "fanciful," "arbitrary," and "suggestive" trademarks. Fanciful trademarks are words that usuall...
We study the incentives for a "diagonal" merger between two Internet Service Providers, one a wireless retail only ISP in two origination markets, and the second a vertically integrated wired retailer in one market and an... more
We study the incentives for a "diagonal" merger between two Internet Service Providers, one a wireless retail only ISP in two origination markets, and the second a vertically integrated wired retailer in one market and an upstream provider in the other. The merger's effects depend on differentiation in access modalities; only with high differentiation does the merger have positive welfare effects. We focus on post-merger foreclosure, which, when it happens, only takes place in the market where the merger is horizontal and not where the merger is vertical. The Network architecture used is meant to capture Internet routing.
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Cyprus, Ireland, Sovereign Debt, Spain, EU, and 14 morePortugal, Italy, Greece, Social Science Research Network, Latin American, Eurozone, Debt, Banking system, Bond, Bonds, Trichet, Brady, Brady Bonds, and Market Value
Wireless telecommunications have become very commonplace in today’s life. Cellular telecommunications have expanded rapidly, and governments around the world have reaped huge sums of money for the use of airwaves by mobile operators.... more
Wireless telecommunications have become very commonplace in today’s life. Cellular telecommunications have expanded rapidly, and governments around the world have reaped huge sums of money for the use of airwaves by mobile operators. However, to assess their evolution to broadband, 3G, and to other technologies it is very useful to take a step back, examine which services the present technologies provide, what future technologies can provide, and how any new technology would integrate in the evolving telecommunications services and equipment industries.
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This paper evaluates the effectiveness of several pricing rules intended to promoteentry into a network industry dominated by an incumbent carrier. Drawing on thework of Cournot and Hotelling, we develop a model of competition between... more
This paper evaluates the effectiveness of several pricing rules intended to promoteentry into a network industry dominated by an incumbent carrier. Drawing on thework of Cournot and Hotelling, we develop a model of competition between twointerconnected networks. In a symmetric equilibrium, the price of cross-networkcalls exceeds the price of internal calls. This" calling circle discount" tends to" tip" the industry to a monopoly equilibrium as would a network externality. Byequalizing charges for terminating calls, reciprocity eliminates ...
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We analyze oligopolistic competition in a multi-period dynamic setting for goods with network effects. Two or more infinitely-lived firms produce incompatible products differentiated in their inherent quality. Consumers live for a single... more
We analyze oligopolistic competition in a multi-period dynamic setting for goods with network effects. Two or more infinitely-lived firms produce incompatible products differentiated in their inherent quality. Consumers live for a single period and receive the network effect of the previous period's sales. We show existence and characterize Markov perfect equilibria that are unique given market shares at the beginning of time and fast convergence to the long run equilibrium. We find that, generally, small network effects help the higher quality firm ...
We analyze two-and three-dimensional variants of Hotelling's model of differentiated products. In our setup, consumers can place different importance on each product attribute; this is measured by a weight in the disutility of... more
We analyze two-and three-dimensional variants of Hotelling's model of differentiated products. In our setup, consumers can place different importance on each product attribute; this is measured by a weight in the disutility of distance in each dimension. Two firms play a two-stage game; they choose locations in stage 1 and prices in stage 2. We seek subgame-perfect equilibria. We find that all such equilibria have maximal differentiation in one dimension only; in all other dimensions, they have minimum differentiation. An equilibrium ...
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This paper evaluates the effectiveness of several pricing rules intended to promote entry into a network industry dominated by an incumbent carrier. Drawing on the work of Cournot and Hotelling, we develop a model of competition between... more
This paper evaluates the effectiveness of several pricing rules intended to promote entry into a network industry dominated by an incumbent carrier. Drawing on the work of Cournot and Hotelling, we develop a model of competition between two interconnected networks. ... To our knowledge, this item is not available for download. To find whether it is available, there are three options: 1. Check below under "Related research" whether another version of this item is available online. 2. Check on the provider's web page whether it is in fact available. 3. Perform a ...
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The future of Greece for the next decade and further depends crucially on how it will restructure its debt. However, the Greek public has very limited knowledge of what restructuring means and what will be its consequences. Additionally,... more
The future of Greece for the next decade and further depends crucially on how it will restructure its debt. However, the Greek public has very limited knowledge of what restructuring means and what will be its consequences. Additionally, the continuous denials do not allow for a healthy discussion of the issue of restructuring. The impression has been created that restructuring and bankruptcy are the same thing–a terrible disaster that has to be avoided at all cost. On the contrary, the truth is that there are many types and ways of ...
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Business, European Union, EU, Greece, Eurozone, and 5 moreRestructuring, Debt, Greek Debt, Debt restructuring, and Haircut
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Many networks stare out as self-contained private (or proprietary) networks. It is often the case that over time private networks link up to form shared networks. However, this does not always happen. Until Citicorp joined the nationwide... more
Many networks stare out as self-contained private (or proprietary) networks. It is often the case that over time private networks link up to form shared networks. However, this does not always happen. Until Citicorp joined the nationwide Cirrus system in early 1991, both" outcomes could be seen in different automatic teller networks in the New York City area. Citicorp's extensive network of automatic teller machines (ATMs) was private and essentially restricted to use by Citicorp's customers only, while the New York Cash Exchange (NYCE) ...
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Technology platforms, such as Microsoft Windows, are the hubs of technology industries. We develop a framework to characterize the optimal two-sided pricing strategy of a platform firm; that is, the pricing strategy toward the direct... more
Technology platforms, such as Microsoft Windows, are the hubs of technology industries. We develop a framework to characterize the optimal two-sided pricing strategy of a platform firm; that is, the pricing strategy toward the direct users of the platform as well as toward firms offering applications that are complementary to the platform. We compare industry structures based on a proprietary platform (such as Windows) with those based on an open source platform (such as Linux), and analyze the structure of competition and industry implications in terms of pricing, sales, profitability, and social welfare. We find that, when the platform is proprietary, the equilibrium prices for the platform, the applications, and the platform access fee for applications may be below marginal cost, and we characterize demand conditions that lead to this. The proprietary applications sector of an industry based on an open source platform may be more profitable than the total profits of a proprietary...
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Business, Computer Science, Economics, Industrial Organization, Network Industries, and 15 moreOpen Source Software, Standards, Management Science, OPERATING SYSTEM, Open Source, Network Effects, Social Welfare, Software Industry, Industry Structure, Profitability, Network Externalities, Market Share, Industry Evolution, Network effect, and Network externality
this paper, this theory ofpredation is deeply flawed for anumber of reasons:(i) it can classify as predatory acts that do not involve below-costpricing;(ii) it does not require that profits be recovered in the long run through a... more
this paper, this theory ofpredation is deeply flawed for anumber of reasons:(i) it can classify as predatory acts that do not involve below-costpricing;(ii) it does not require that profits be recovered in the long run through a priceincrease;(iii) it is too vague and hard to implement since a judge would need to knowwhat monopoly profits would have existed if the act that may be characterized as anticompetitivewere not taken, and the extent that this particular act has affected monopolyprofits;(iv) moreover, in the hypothetical long run in which the ...
We discuss salient economic aspects of the Internet, including the possible abolition of net neutrality by local broadband access networks as well as potential incompatibilities and degradation of connectivity in the Internet backbone.
"Trademarks facilitate consumers' choice among experience goods and transmit quality signals for infrequently consumed goods. Trademarks are indispensable for the efficient provision of products with the wide range of variety... more
"Trademarks facilitate consumers' choice among experience goods and transmit quality signals for infrequently consumed goods. Trademarks are indispensable for the efficient provision of products with the wide range of variety and quality combinations demanded in a modern economy. Nevertheless, they can also sometimes have anticompetitive effects. Trademarks allow firms to tie in desired mental images with the advertised goods and to compete in perception advertising. The resulting possible distortions of competition fall into three categories. ...
This course analyzes the economics of the “new economy,” networks, the Internet and of related industries such as telecommunications and cable television. The emergence of the Internet has allowed for new business models. These electronic... more
This course analyzes the economics of the “new economy,” networks, the Internet and of related industries such as telecommunications and cable television. The emergence of the Internet has allowed for new business models. These electronic trade models take advantage of the search capabilities and economies of scale of the Internet. In this course, we will study key strategic issues facing companies that utilize these new business models. For example, we will study technology transitions in distribution of digitized music and video as electronic downloads in contrast with distribution in physical form (CD, DVD, Blu-Ray) in stores or by mail. Further, we will discuss distribution of physical goods (for example books, TVs) based on search at “virtual stores” (such as Amazon.com) in contrast with traditional “brick and mortar” stores. We will also analyze the merits of the various pricing methods used (a-la-carte, bundled, subscription).
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We are able to match 75% of the cellular IDs into fine-coded GPS positions. The remaining 25% of location IDs are inferred in the following way. For each sender, we obtain the previous active location (within a few hours), and match that... more
We are able to match 75% of the cellular IDs into fine-coded GPS positions. The remaining 25% of location IDs are inferred in the following way. For each sender, we obtain the previous active location (within a few hours), and match that location ID to the GPS data. The previous transactions can include any activity excluding being a receiver of the P2P transfer, for which we do not directly observe the location data. In this way, we are successful in matching 24% of the data. The remaining 1% is approximated by using the first few numbers of the location ID, which defines the location of sender with an error of a few miles. For our objective to distinguish short-, mediumand long-distance transfers, the matching procedure is reliable. Since we do not observe the location ID of the receiver, we have to approximate it. Using a procedure similar to one we used for the unmatched senders’ IDs, we match the most recent transaction of the receiver. In the vast majority of cases, we are abl...
This case study discusses briefly the economic and legal issues pertaining to the antitrust case of the United States and a number of States against Microsoft. * Stern School of Business, New York University, New York, NY 10012, (212)... more
This case study discusses briefly the economic and legal issues pertaining to the antitrust case of the United States and a number of States against Microsoft. * Stern School of Business, New York University, New York, NY 10012, (212) 9980864, fax (212) 995-4218, http://www.stern.nyu.edu/networks/, neconomi@stern.nyu.edu Copyright ©, N. Economides
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The consequences of the CFI's decision are significant both for Microsoft and the computing industry and demonstrate a significant divergence in EU and U.S. antitrust law.