Research On Dynamic Competition Theory Of Network Industries

While division of labour, division of information and network effect are hot spots of the social and industrial study, division of information based on new division of labour and newly network industries characterized by network effect may impact on the development of society and economy in the future, so it is realistically meaningful to research on internal essence and advance competition and dynamic evolution of network industries. This paper, network industry as object of analysis, aims at deep dissecting the regulation and competition in network industry by combining with new phenomena and new characteristics.Network externality, also called as network effect, is concerned abroad with the swift growth of network industry and will deep influence the structure and development of the industry. We explore the fountain of network externality and unveil the value of network externality and its allocation step by step, analyze the law of regulation and competition in network industry from its impact on demand, supply and their equilibrium, on regulation and competitive price and equilibrium, on the quantity competition equilibrium, on incentive with incomplete information and dynamic pricing, on the competition of telecommunication industry in China, and propose the scientific framework of theory study. Main result of research includes:1. The extension and meaning of network externality or network effect are expanded. Being numerous in industry, network effect works on the development of micro individual and macro industry more or less, directly or indirectly. Network effect comes of division of labour and increases with the development of division economy. It promotes division of labour more, and reduces transaction charge, in reverse, lower charge improve network effect and division economy. Network effect impulse the variety of social organization, both expands mainstream and props up the puniness.2. The value of network effect and its allocation depend on the structure and size of network. While there are several network structures, the value of network increases arithmetically, geometrically or exponentially with its size. Its allocation depends on the structure, while the allocation formation is different between consumers and firms. The gross network value and individual value are relative by several ways.3. Network effect influenceing the demand and supply of network goods certainly impacts the equilibrium. Positive network externality enhances demand, and reduces or saves marginal cost, so it can advance production and social welfare. The demand curve of network goods come under expectation of consumer, while equilibrium is realized if the expectation equals to actual size.4. This paper puts forward and demonstrates regulation and dynamic competition theory with network externality. Network utility with network goods is different from traditional public utility. By introducing time order this paper analyzes and contrasts Ramsey-Boiteux pricing while the competition in or out of regulation, monopolistic and subsidy competition out of regulation.5. It propounds and demonstrates Cournot competition equilibrium with network externality. Introducing network externality into Cournot competition model, studies and contrasts the equilibrium quantity, price and profit with the form of expectation value and expectation function while the goods are complete compatible, incompatible or incomplete compatible.6. Research on the network dynamic competition theory under incomplete information. Introducing incomplete information about preference of consumer into model, combining with network externality, incentive and dynamic pricing, it analyzes dynamic game and equilibrium among consumer, incumbent and entrant and studies the interaction of consumer and monopolist and the dynamic equilibrium pricing of incumbent and entrant with different strategies.The dissertation includes eight parts: At first it introduces the background, the purpose of this paper and the research status at present, the following is the introduction of the theory basis, the notion of network externality and the review of the research, including industry organization theory, externality theory and network externality theory. Chapter 2 analyzes the relation between network effect and its value; deep explores the structure and allocation of network value. Chapter 3 discusses Network effect influencing demand and supply of network goods and their equilibrium. Chapter 4 Brings forward and demonstrates regulation and dynamic competition theory with network externality. Chapter 5 discusses Cournot competition equilibrium theory with network externality. Chapter 6 Researches the network dynamic competition theory under incomplete information. Chapter 7 analyzes the regulation and competition reform course and proposes the development trend. The last chapter makes a conclusion of paper and states several topics in future research.