The Economics of Networks: A Survey of the Empirical Literature

32 Pages Posted: 13 Oct 2009

See all articles by Daniel Birke

Daniel Birke

Aston Business School; McKinsey & Company


Network effects, the increase in value of consuming a product if many other consumers use the same product, are a feature of many markets and in particular of many high-technology products. This paper surveys the burgeoning empirical literature that has developed especially during the last years. After theoretical work dominated the earlier years of research in this area, newer research has combined theoretical models with empirical studies and applied work with direct implications for public policy, marketing and company strategies. Furthermore, insights from the study of social networks have been applied to analyse how consumers interact with each other. The paper argues that a closer analysis of the network structure of consumer interaction promises fruitful future research avenues and advances in our understanding of how network effects operate.

Suggested Citation

Birke, Daniel, The Economics of Networks: A Survey of the Empirical Literature. Journal of Economic Surveys, Vol. 23, Issue 4, pp. 762-793, September 2009, Available at SSRN: or

Daniel Birke (Contact Author)

Aston Business School ( email )

Aston Triangle
Birmingham, B4 7ET
United Kingdom


McKinsey & Company ( email )

Am Sandtorkai 77
Hamburg, 20457
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