• Journal of Korean Society of Industrial and Systems Engineering
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• v.40 no.1
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• pp.105-113
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• 2017

Network externality can be defined as the effect that one user of a good or service has on the value of that product to other people. When a network externality is present, the value of a product or service is dependent on the number of others using it. There exist asymmetries in network externalities between the online and traditional offline marketing channels. Technological capabilities such as interactivity and real-time communications enable the creation of virtual communities. These user communities generate significant direct as well as indirect network externalities by creating added value through user ratings, reviews and feedback, which contributes to eliminate consumers' concern for buying products without the experience of 'touch and feel'. The offline channel offers much less scope for such community building, and consequently, almost no possibility for the creation of network externality. In this study, we analyze the effect of network externality on the competition between online and conventional offline marketing channels using game theory. To do this, we first set up a two-period game model to represent the competition between online and offline marketing channels under network externalities. Numerical analysis of the Nash equilibrium solutions of the game showed that the pricing strategies of online and offline channels heavily depend not only on the strength of network externality but on the relative efficiency of online channel. When the relative efficiency of online channel is high, the online channel can greatly benefit by the network externality. On the other hand, if the relative efficiency of online channel is low, the online channel may not benefit at all by the network externality.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.38 no.3
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• pp.149-158
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• 2015

The purpose of this paper is to investigate the determinants of new product diffusion. We seek to document and explain systematic features of product diffusion. In this essay, we examine the well-documented empirical regularity that the speed of diffusion has accelerated during the twentieth century. The empirical results show that the main source of acceleration are faster declines in prices. Faster price declines make the product affordable to more consumers within a given period of time. Based on theories of intertemporal price discrimination and learning-by-doing, the association between the speed of adoption and the speed of price decline was explained. Faster price declines are attributed to several product characteristics as well as changes in income distribution. Above all, the introduction of consumer electronic products in more recent years can be regarded as the most important factor in accelerating price declines. Consumer electronic products are technologically different from non-electronic goods, in that semiconductors are important components. As the price of semiconductors has dropped rapidly, the falling production costs can be rapidly incorporated to the price of consumer electronic goods. Furthermore, most of the recently introduced consumer electronic products have network externalities, and many products with network externalities require complementary products. A complementary product becomes more readily or cheaply available as more people have the main product. One major difference between previous studies and this study is that the former focuses only on the factors that operate directly on the speed of adoption, while this study incorporated factors that work through price changes as well as the factors that work directly on the speed of adoption.

• Journal of Information Technology Applications and Management
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• v.27 no.6
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• pp.197-224
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• 2020

Mobile games have become one of the most important driving forces of the game industry. We focus on the continuous intention to use Chinese mobile games from the perspective of experiential marketing and network externalities. We integrate user experience, network externalities and flow theory into expectation confirmation model and explore the influencing factors of continuous usage intention of Chinese mobile game and propose a research model. Game experience, service experience, perceived enjoyment, social interaction, challenge, perceived number of users and perceived number of peers were employed as independent variables, while flow, perceived value and satisfaction as mediating variables and continuous intention as the dependent variable. After surveying 426 samples, the model is tested with structural equation model. The results reveal that perceived enjoyment significantly positively influences perceived value, flow, satisfaction, and continuous intention. The greater the enjoyment of the game, the greater the satisfaction of the game and the greater the willingness to use it continuously. Game experience has a significant direct effect on continuous intention, which indicates that a better game experience can retain more users. Service experience and perceive number of peers positively influence satisfaction. Another finding is that social interaction and perceived number of users positively influence perceived value and flow, which indicate that social attributes are critical roles for retaining users. Game challenge also positively influences flow. The proper level of challenge is more likely to cause users to enter the state of flow. Flow indirectly influences continuous usage intention through the satisfaction of the game, which indicates that satisfaction is driven by flow experience and further retaining users. Empirical results implied that mobile game companies need to focus on improving user experience, expectation satisfaction and extending network externalities to improve the continuous intention of using mobile game.

• Land and Housing Review
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• v.13 no.3
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• pp.69-81
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• 2022

Unplanned land use, that is, unplanned development, causes various negative externalities. In the past, Korea has experienced significant socio-economic costs due to reckless development centered on the boundary between urban and non-urban areas.. Unplanned land use can be viewed as a result of the interaction of various factors.. Therefore, it is difficult to develop in areas where unplanned land use occurs intensively. It is necessary to strengthen legal and institutional measures so that negative externalities do not persis. In this study, we present a spatial analysis methodology to effectively find spatial clusters where unplanned land use is concentrated. By demonstrating and applying this to individual development activities that occurred in Asan City, we examine the usefulness of information to support decision making when establishing mid-to-long-term growth management strategies at the local government level.

• Journal of the Economic Geographical Society of Korea
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• v.12 no.4
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• pp.627-644
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• 2009

In the knowledge-based economy highlighting the importance of human capital, there has been a growing interest in human capital externalities as a fundamental engine of growth and development of a region. The purpose of this study is to analyze human capital externalities using 3-level hierarchical linear model(3-HLM), decomposing determinants of wages into three levels involving workers(level-1) nested within firms(level-2) nested within regions(level-3). This study separately estimates the effect of the average education level on the wages by three different schooling groups on the assumption that the intensity of knowledge spillovers varies with each group's schooling level. The main results are as follows; First, the coefficient of the average education level of a region shows 0.044, indicating that one-year increase in the average level of schooling could increase average individual earnings by 4.4%. Secondly, the external effects of human capital on three different schooling groups are considerably different, raising less than high school graduates' wages by 3.0%, college graduates' wages by 4.7%, and graduate schools' wages by 11.8%, respectively. Thirdly, well educated workers are much more sensitive to the variation of the regional education level than less educated ones when we apply the shares of each schooling group as alternative measures for the average level of education. Such findings of this study draw an implication that local governments could speed up regional economic growth in the knowledge-based economy by not only raising total human capital stock in a region but building the close networks that promote productivity-enhancing human capital external effects.

• Proceedings of the Korean Nuclear Society Conference
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• 2005.05a
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• pp.1170-1171
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• 2005

• East Asian Economic Review
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• v.23 no.4
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• pp.381-407
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• 2019

The Korean wave has become a global phenomenon whose effect has been widely studied in Asia, Europe and the US. However the presumption of cultural distance makes it appear unlikely that the Korean wave could gain traction among African consumers of cultural products. As such, a dearth of evidence exists on the effects of the wave in Africa. This paper examines the effect of the wave in East African countries employing both descriptive and Probit model analyses. The results show that, contrary to conventional beliefs, most Africans surveyed perceive value proximity with Korea through the values conveyed in Korean dramas, movies and music. Confucius values, such as filial piety, family love and respect for the elderly are the most appealing to the East African audience. Importantly, contact with Korean wave contents contributes to the respondents' disposition to form favorable attitude towards Korea. The African consumers of Korea's cultural products are equally likely to purchase other Korean commercial products. These results remotely suggest that Hallyu may be a tool for advancing Korea's soft power towards Africa and could generate positive economic externalities.

• Journal of the Korean Operations Research and Management Science Society
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• v.35 no.4
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• pp.55-79
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• 2010

This study deals with a model for platform competition in a two-sided market. We suppose there are both direct and indirect network externalities between suppliers and users of each platform. Moreover, we suppose that both users and suppliers are distributed in their relative affinity for each platform type. That is, each user [supplier] has his/her own preferential position toward each platform, and users [suppliers] are horizontally differentiated over [0, 1]. And for analytical tractability, some parameters like direct and indirect network externalities are the same across the markets. Given the parameters and the pricing profile, users and suppliers conduct subscription game, where participants select the platform that gives them the highest payoffs. This game proceeds according to a replicator dynamics of the evolutionary game, which is simplified by properly defining gains from participant's strategy in the subscription game. We find that depending on the strength of these network effects, there might either be multiple stable equilibria, at which users and suppliers distribute across both platforms, or one unstable interior equilibrium corresponding to the market tipping in favor of either platform. In both cases, we also consider the pricing power of competing platform providers under the framework of the Stackelberg game. In particular, our study examines the possible effects of the type of competition between platform providers, which may constrain the equilibrium selection in the subscription game.

• Journal of the Korean Society of Marine Environment & Safety
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• v.14 no.4
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• pp.275-287
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• 2008

Noise externalities are a ubiquitous problem in modern societies. Research to estimate damages and potential efficient solutions therefore is important for addressing such problems. The results of a hedonic property model show that noise has a statistically significant and quantitatively important negative effect on property values. The key results for the best model show that damages (in year 2000 dollars) are - $5000 ${\ast}$ (ln dB), where dB is noise measured in decibels, allowing for the influence of other factors. Because ln(dB) is a strictly concave funaion, the "noise damage function"exhibits diminishing marginal effects with noise.

• Knowledge Management Research
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• v.13 no.3
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• pp.1-16
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• 2012

Nowadays, many first-time Internet users start off heavily using SNSs (Social Network Sites), such as Cyworld, Facebook, and Twitter. The reason for the growth of SNS use is closely related to the various services of gaming, playing, using entertainment items, sharing knowledge etc., provided by the SNS; technically, the most important of the services provided would be the behavior of sharing knowledge among people connected and networked in the site. In sum, we assume that the users may communicate well with each other and pay attention to building a close social network using the abovementioned activities. However, researchers have just begun to focus on the issues explaining why Internet users rush into SNSs and enjoy their time there. Therefore, we investigated the reasons for posting and sharing knowledge voluntarily on the SNS and how others respond to the posted knowledge and are actually affected by the behavior. We applied social identity theory and social capital theory in this study to find which network externalities in SNSs may affect online identity-based attachment and cause them to produce a knowledge sharing generation. We found that people's online identity in SNSs is closely related to and influences knowledge sharing. This empirical study resulted in the importance of social relations in SNSs, which leads to sharing knowledge.