Net Neutrality Graph

Following on the graph of Metcalfe's Law from last week, here is a take on network externalities, a graph that I've adapted from the article by Stan Leibowitz and Stephen Margolis in the Handbook of Telecommunications Economics (vol. 1, copyright 2002).

The interesting difference between this graph and Metcalfe's graph is that, for Metcalfe, the value of the network is rising exponentially while the marginal cost of adding another user rises linearly, but in the Leibowitz and Margolis version of the story, marginal benefit rises linearly while marginal cost rises exponentially.

Today's graph is basically a standard externalities graph, labeled to make it apply to a situation where network effects have become externalities that lead to the network being too small. This issue of network size is important; since the value of the network derives from the other users of the network, you want to keep adding as many people to the network as you can, until the cost of reaching the people still outside is greater than the extra value they would bring. If the network is too small, then we all lose out.

But as important as the question of network size is, it isn't really my biggest concern about goods with strong network effects. For me it's a matter of how all that network value gets shared between network owners and network users. Call me biased (I don't own a network of any commercial significance), but I want the lion's share of the network value to go to the users. But more on that later.

So far as Inkscape is concerned, I found a nice video on Youtube showing how to do superscripts and subscripts (along with text kerning) in Inkscape. The process isn't as automagic as you would find in most commercial Windows programs that deal with text, such as Illustrator, Indesign, or Word, but it's also not hard to do, and Inkscape will do everything I need it to, and more.