Network Effects in Biology

34 Pages Posted: 31 Dec 2009 Last revised: 30 Mar 2013

Joachim Henkel

TUM School of Management - Technische Universität München (TUM); Centre for Economic Policy Research (CEPR)

Stephen M. Maurer

University of California, Berkeley

Date Written: December 30, 2009

Abstract

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.

Keywords: network effects, learning spill-overs, biology, stem cells

Suggested Citation

Henkel, Joachim and Maurer, Stephen M., Network Effects in Biology (December 30, 2009). Available at SSRN: https://ssrn.com/abstract=1529602 or http://dx.doi.org/10.2139/ssrn.1529602

Joachim Henkel (Contact Author)

TUM School of Management - Technische Universität München (TUM) ( email )

Arcisstr. 21
Munich, D-80333
Germany

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Stephen M. Maurer

University of California, Berkeley ( email )

Berkeley, CA 94720
United States

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