Network Effects in Biology
TUM School of Management - Technische Universität München (TUM); Centre for Economic Policy Research (CEPR)
Stephen M. Maurer
University of California, Berkeley
December 30, 2009
Network effects play a central role in many information goods industries including electronics and software. So far, however, their role in shaping biotechnology innovation has largely been overlooked. This paper presents data documenting the presence of strong network effects in stem cell research. We also present survey evidence that researchers strongly prefer to work with cells that others have used in the past. We present a simple model of this process. Our model predicts that the dominance of particular cell lines should - unlike software or electronics - slowly erode over time. Our stem cell data support this prediction.
Number of Pages in PDF File: 34
Keywords: network effects, learning spill-overs, biology, stem cells
Date posted: December 31, 2009 ; Last revised: March 30, 2013
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