Complex adaptive systems in the information economy : a mobile communications case study

Abstract

The new information economy acts as a microcosm where the dynamics of complexity are present through the pervasive effects of increasing returns. Network externalities are the ubiquitous force behind winner-takes-all scenarios where only the strongest firms survive. The effect is evident in cases such as Microsoft’s quasi-monopoly and eBay’s dominance of the consumer and small business auctions market. Interestingly however, many important industries exhibiting strong network externalities, have emerged with no dominant winner and the competitive environment is preserved.