Structure, Behavior And Performance Of The Network Industry Research

With the rapid development of network economics in the world, network industries have gained an increasing importance in social economy. Ever since the 1990s, scholars at home and abroad have begun to show great interest in the theoretical studies of network economics and network industries, but theoretical studies tend to be far more than enough to be in line with the rapid development of the network economics and the network industry. The traditional theories of industrial organization, which focused on the"Marshall conflict", are seriously challenged by the market structure of network industries that can hold economies of scale as well as competition vitality. And also network industries'operating environment, the leading factors and economic laws which are different from that of traditional industries, all call for the innovation of industry organization theories. Thus, the industrial organization theories, originated from the traditional economy, must advance with the times to meet the needs of the development of the network economy and the network industry. As a result, it is an urgent necessity to connect the theories of industrial organization with the current network economic environment and the characteristics of network industries, with a view to enriching and expanding the theories of industrial organization and network economic theories.Under the framework of expanded SCP paradigm, namely SCP-R paradigm. this dissertation, titled"Research on the Structure, Conduct and Performance of the Network Industry", attempts to conduct a more systematic and complete study of the market structure, enterprise behaviors, economic performance of network industries and the government's regulations on the network industry. The main contents are as follows:Chapter I outlines the theoretical foundations of this dissertation and summarizes other related theories. First of all, theories of industrial organization are presented in the order of historical evolution, and then some other theories related to the network economics and network industries are summarized, including the nature of network economics, the definition of the network industry, the characteristics of network economics as well as the operating laws of the network industry.Chapter II probes the formation mechanisms of the monopoly in network industries, analyses the characteristics of monopoly, the defining features of competition and the relation between monopoly and competition. An empirical analysis of the market structure of the network industry is conducted by measuring the concentration ratio of the core industries in network economics.Chapter III explores the free pricing, penetration pricing and discriminatory pricing model of network industries since the traditional equilibrium price determinism and pricing strategies cannot be applied in network industries.Chapter IV studies the competitive behaviors in the network industry and the selection of the corresponding strategies: the competition for market share vs. the mainstreaming strategy, the stability of user base vs. the lock-in strategy, standardization vs. the standard competitive strategy, differentiation competition vs. the compatibility strategy.Chapter V analyses the economic efficiency of network industries based on the first chapter's research of the market structure and enterprise behaviors of network industries, including the static efficiency of resource allocation and X efficiency, dynamic technological innovation and technological progress efficiency.Chapter VI elaborates on the construction of government regulation mechanism in network industries, the possible non-efficiency problems, selection of the corresponding regulation measures and the effectiveness of government regulations.The main findings of this dissertation are as follows:1. According to the categorization of market structure made by Bain and Zhi Caoyi, the result of measuring concentration ratio of the core industries in network economics shows that the market structure of network industries is, in most cases, oligopoly-type structure. Different from the formation mechanism of the natural monopoly, administrative monopoly and exogenous monopoly in traditional economy, forms of monopoly in network industry are the scale monopoly, technology monopoly and endogenous monopoly. The monopoly of the network economy is objective and inevitable.The monopoly and competition of the network economy is compatible and symbiotic while the monopoly and competition repel each other in traditional economy, the monopoly is a temporary form of absolute competition.2. To attract consumers and get the critical capacity to start the positive feedback, network enterprises often adopt strategies of free pricing and penetration pricing; the pricing is directed by the transfer from the marginal cost of sellers to the payment cost of buyers, which made discrimination pricing the most common pricing strategy in network industries. discrimination price is determined in accordance with the different consumers'willingness to pay. 3. Different source of competitive advantage and different factors which decide the winning and defeat of competition made network companies take different competitive strategies from the traditional enterprises. For example, to take mainstreaming strategy to increase their market share; to stabilize market share by using lock-in strategies; to adopt standard competitive strategies to compete for leading status; to adopt compatible strategies to take full advantage of network effects.4. Network industries'oligopoly market structure is a temporary monopoly formed in the process of dynamic competition. Although network monopoly enterprises hold market force to a certain extent for a period of time, this market force cannot be developed into monopoly power easily because of the temporality and not maintainability of their monopoly. network monopoly enterprises can not manipulate the market and abuse monopolistic behaviors just as traditional monopoly companies did.. Thus, the economic efficiency of network industry oligopoly market structure is superior to that of the traditional monopolistic or oligopolistic market structure.5. It is still necessary of government regulation since the operation of network industries might have made a number of non-efficiency issues, but due to the change of economic laws, the anti-monopoly laws and the government regulations, which were based on traditional industries'economic laws are not fully applicable to network industries. Value orientation, objectives, content, etc. of government regulation should be adjusted properly in accordance with the characteristics of the network industry. The globalization of network economy and the dynamic oligopoly competitive market structure will inevitably lead to a more loose government's regulation system.