The cake cutting problem models the fair division of a heterogeneous good between multiple agents. Previous work assumes that each agent derives value only from its own piece. However, agents may also care about the pieces assigned to other agents; such externalities naturally arise in fair division settings. We extend the classical model to capture externalities, and generalize the classical f...

A subsample (n = 2,550) of the 2005 US National Alcohol Survey of adults was used to estimate prevalence and correlates of six externalities from alcohol abuse--family problems, assaults, accompanying intoxicated driver, vehicular accident, financial problems and vandalized property--all from another's drinking. On a lifetime basis, 60% reported externalities, with a lower 12-month rate (9%). W...

The social learning network (SLN) constructed based on web 2.0 techniques demonstrates some unique characteristics comparing to traditional e-learning context based on 1.0 technique. In response to the new characteristics in SLN, we advance the theoretical understanding of user satisfaction by reconceptualising e-learning as a relational process among students. Based on that, we draw on network...

The paper studies contracting between one principal and N agents in the presence of multilateral externalities. When the principal commits to publicly observed bilateral contracts, inefficiencies arise due to the externalities on agents’ reservation utilities. In contrast, when the principal’s offers are privately observed, inefficiencies are due to the externalities at efficient outcomes. When...

Theoretical research on networks and technology standards suggests that network externalities, the additional value of a product or service resulting from an existing installed base, have strategic implications. This paper uses the WWW software market to empirically test the network externalities hypothesis in a market of composite goods. Among the findings is that vendors who provide both comp...

This paper surveys the recent literature on the endogenous formation of economic coalitions, in particular, the partition function literature that allows for externalities across coalitions. Various economic coalitions are classified either as coalitions with positive externalities (output cartels, R&D coalitions with spillovers, public-goods (environmental) coalitions, free-trade areas) or as ...

We extend the models in “Competition in two-sided markets” of Armstrong (2006, Rand Journal of Economics) by adding within-group externalities. In the monopoly and duopoly cases, positive within-group externalities reduce the price of the own group. Negative externalities have an opposite price effect. In the case of a competitive bottleneck, we show by examples that within a certain range of p...

This paper analyses dynamic pricing in markets with network externalities. Network externalities imply demand inertia, because the size of a network increases the usefulness of the product for consumers. Since past sales increase current demand, …rms have an incentive to set low introductory prices to be able to increase prices as their networks grow. However, in reality we observe decreasing p...

Costs associated with traffic externalities such as congestion, air pollution, noise, safety, etcetera are becoming unbearable. The Braess paradox shows that combating congestion by adding infrastructure may not improve traffic conditions, and geographical and/or financial constraints may not allow infrastructure expansion. Road pricing presents an alternative to combat traffic externalities. T...

We analyze the extent of network externalities for the automated clearinghouse (ACH) electronic payments system using a panel dataset on bank adoption and usage of ACH. We develop three methods. The first examines the clustering of ACH adoption. The second examines the impact of market concentration and the size of competitors on ACH adoption. The third examines the impact of ACH adoption by sm...