Data_Sheet_1_Product quality, network effects, and efficiency of network markets.PDF

The objective of our study is to capture the roles of product quality and network effects in the success and efficiency of network markets under strategic settings that defined in terms of market share as a strategic factor and profit as a financial indicator. The research paper shows that the efficiency of network markets depends heavily on the phase adjustment of competition models and the balance of network effects and product quality among enterprises. the network market is always efficient in price competition, but not true in quantity competition when the network effect difference is sufficiently large or/and the quality difference is relatively small, then network effects may play a perverse role in market efficiency. The main findings reveal that network effects do not always enhance the role of quality in market efficiency and market growth. The research outcomes point to high quality enterprises’ attitude toward compatibility with enterprises with large network effects. This research paper also offers insights on government intervention to correct the distorted impacts of sufficiently large network effects on the efficiency of network markets.

本研究旨在探究产品质量与网络效应在网络市场的成功及效率中的作用，研究设定以市场份额作为战略要素、以利润作为财务指标来刻画战略场景。本研究表明，网络市场的效率在很大程度上取决于竞争模型的阶段性调整，以及企业间网络效应与产品质量的均衡状态。在价格竞争场景下，网络市场始终具备效率；但当网络效应差异足够大，或产品质量差异相对较小时，数量竞争场景下的网络市场效率则未必成立，此时网络效应可能对市场效率产生反向作用。核心研究结论显示，网络效应并非总能强化产品质量对市场效率与市场增长的作用。本研究结果为高质量企业如何处理与具备大规模网络效应企业的兼容性问题提供了参考方向。此外，本研究还为政府干预以纠正规模过大的网络效应对网络市场效率造成的扭曲影响提供了理论启示。