by Carl Shapiro, Hal R. Varian
ISBN: 087584863X
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Found in 5 comments on Hacker News
mrcode007 · 2023-06-30 · Original thread
You’ve fallen for a 30 year old playbook. It’s described in detail in this book under vendor lock in. Check out the bios of the people who wrote it and where they work now.

https://www.amazon.com/Information-Rules-Strategic-Network-E...

I know it may sound not helpful but achieving vendor independence is a valid reason for adopting at least some software design patterns so you can swap the implementations without changing the interface. It’s becoming increasingly more important as the cloud service providers are getting more aggressive just because they can get away with it.

danblick · 2017-05-13 · Original thread
The term "information good" is from economics: https://en.wikipedia.org/wiki/Information_good

An information good is one for which it's very cheap to produce additional units. Unfortunately, I'm probably abusing the term, since books are listed as an example of information goods. The idea is that most of the cost of producing the book goes into the content (writing, editing, etc.) and actually printing one additional book is cheap. (When I said books are "imperfect" information goods I meant that they still require paper and shipping and retailing and such, but it's probably just a bad use of the term.)

There's a fantastic book about the economics of information goods called "Information Rules" ( https://www.amazon.com/dp/087584863X ). Software is an information good so this covers some topics relevant to the digital economy. My favorite part is the chapter on lock-in. In particular the discussion around the equation:

profits from a customer = quality advantage + switching costs

which puts "(marginal) goodness of your product" on equal footing with "pain you can inflict on your customer for leaving".

davidw · 2014-10-02 · Original thread
This book has a great treatment of the underlying economics of 'information goods' if you're interested in this kind of thing and want something a bit (well, a lot) more thorough.

http://www.amazon.com/Information-Rules-Strategic-Network-Ec...

One of the authors is now the chief economist at Google. I highly recommend it.

dredmorbius · 2014-02-26 · Original thread
The relevant book to read on this topic is Varian and Shapiro's Information Rules. Aimed at companies, and written in the late 1990s, its concepts are now increasingly applicable to the consumer information/IT space. In particular it discusses lock-in, or what we're now calling "fucking ecosystems".

http://www.amazon.com/Information-Rules-Strategic-Network-Ec...

zissou · 2013-01-05 · Original thread
Two-sided markets and platform competition have been popular topics for microeconomic theorists since around the 2003 work of Rochet and Tirole[1] (IMHO, Tirole will win the Nobel Prize in the next 3 years). These two helped put together much of the generality left out of Baye and Morgan's 2000 paper[2] that looked at information gatekeepers on the Internet.

In the late 1990s and early 2000s, economists really began to look at the Internet (Hal Varian, Google's Chief Economist is probably the best example -- see his 1998 book "Information Rules"[3]). They tried to tackle issues like price dispersion in a homogeneous goods market on the Internet (that is, why does price dispersion still exist in an Internet market for a homogeneous good?) and other problems of consumer information heterogeneity, consumer search, and so on. Starting in early 2000, economists began to take interest to the "gatekeeper" model of Internet prices -- a website that would aggregate prices across online retail sites. "If a consumer just has to go to one site to become informed about all the prices in the market, then consumers can costlessly become informed about all the prices in the market by going to the gatekeepers site" many microeconomists said. This led many researchers to look into the model of fees charged by gatekeepers to retailers who wanted to have their prices posted on the site.

Eventually, Tirole et al realized a way to generalize the concept of a two-sided market by describing it as a platform where the owner of the platform receives revenue from two [or more] sources (i.e. buyers via advertising and sellers via gatekeeper fees), hence making the general distinction between a multi-sided market and the the classic supply/demand market model. Today multi-sided markets are used to model almost all forms of platform competition.

From my perspective, research on the economics of the Internet hit a bit of a slump in the late 2000s as [too] many economists instead focused on macroeconomic issues during the bubble, but has grown in interest quite a bit again over the last 3-5 years with the rise of social networking and similar app/mobile platforms. So much of this research relies on fundamental models of two-sided markets, that I encourage anyone curious about really hot microeconomic theory topics related to the Internet and start-up industry to dig into platform competition.

[1] Platform Competition in Two-Sided Markets, http://ideas.repec.org/p/ide/wpaper/654.html

[2] Information Gatekeepers on the Internet and the Competitiveness of Homogeneous Product Markets, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=215548

[3] Information Rules, http://www.amazon.com/gp/product/087584863X/