Volume 10, Issue 1

We examine patterns of acquiring non-native languages in a model with two linguistic communities with heterogeneous learning skills, where every individual faces the choice of self-learning the foreign language or acquiring it at a profit-maximizing linguistic school. We consider a one-school model with divisions in both communities and various two-school settings with a school in each community. We compare the number of learners and welfare implications under self-learning with those obtained under various schooling contexts. In particular, we show that for communities with similar size, introducing language schools always increases the number of learners with respect to the exclusive self-learning option.

This article investigates the pricing decisions in two-sided markets when several platforms are needed simultaneously for the successful completion of a transaction. The results indicate that the anticommons problem generalizes to two-sided markets. On the other hand, the limit of an atomistic allocation of property rights is not monopoly pricing.

We study the early adoption of Twitter in the 111th House of Representatives. Our main objective is to determine whether successes of past adopters have the tendency to speed up Twitter adoption, where past success is defined as the average followers per Tweet — a common measure of “Twitter success” — among all prior adopters. The data suggests that accelerated adoption can be associated with favorable past outcomes: increasing the average number of followers per Tweet among past adopters by a standard deviation (of eight followers per Tweet) accelerates the adoption time by about 112 days. This acceleration effect is weaker for those who already have adopted Facebook and those who have access to information about a large number of past adopters. We later find a positive relationship between an adopter's own success and the success of adopters preceding him/her. Thus, there may exist benefits associated with adopting Twitter based on past successes of others. In general, the patterns we find are consistent with predictions generated by a simple model of adoption delay with learning.

This paper relates to the current discussion about how to measure the net cost and the unfair burden of universal service provision in network industries. The established profitability cost approach compares the profit of a universal service provider (USP) with and without a universal service obligation (USO). This paper argues that the net cost of universal service provision critically depends on the regulatory counterfactual and hence the USP’s strategy space without USO. On the one hand, a strong USO limits the USP’s means to position itself in the market, which offers cream-skimming opportunities and invites competition. On the other hand, a simple game-theoretic entry analysis shows that the USO may effectively serve as a valuable strategic commitment device to deter entry. Hence, the USO may be valuable to the USP despite causing inefficient operations. From a policy perspective, this constitutes a counter-intuitive result for the definition of the USO: the stricter it is regulated, the more detrimental it may be to competition and, therefore, the smaller is its burden on the USP.