Hacker News new | past | comments | ask | show | jobs | submit login

How is this different from the usual network effect?



It's not particularly different (though the low switching costs are somewhat unusual). Regardless, there's a network externality that allows Elsevier to capture excess rents. It's not that Elsevier doesn't provide any value, but at the same time, its profits outpace that value by a large margin. Nonetheless, coordination problems can easily prevent a competitor who pledges not to take those rents from disrupting Elsevier's position, so it's not as easy as saying "there's nothing stopping you from starting a new competitor".




Join us for AI Startup School this June 16-17 in San Francisco!

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: