Network Economy:Foundations and Concepts

Abstract

In recent decades, societies have witnessed huge spread of digital technology and everyone became submerged in a world of complex networks. This shift led to a deep change in the behavior of economic units on both the supply and demand sides, giving birth to new approaches in microeconomics and the emergence of the network economy. One of the most important foundations of the network economy is that the value of network goods is mainly dependent on the existence of Network Externalities which influence consumer decision and by which the diffusion model of network goods. In this article, we will explain the basic principles and concepts as an introduction to the network economy.