Principles of Network Economics
Network problems are manifold and extremely complex. Many problems result from engineering details or mathematical difficulties, others are caused by disregarding economic principles and imperfections of markets. The text provides a fairly integrated appr
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Hagen Bobzin
Principles of Network Economics
Springer
Author Dr. Hagen Bobzin Private Docent University of Siegen School of Economic Disciplines Department of Economics 57068 Siegen Germany hug.bobzin @ t-online. de
ISSN 0075-8442 ISBN-10 3-540-27693-9 Springer Berlin Heidelberg New York ISBN-13 978-3-540-27693-7 Springer Berlin Heidelberg New York This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically therightsof translation, reprinting, re-use of illustrations, recitation, broadcasting, reproduction on microfilms or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9,1965, in its current version, and permission for use must always be obtained from Springer-Verlag. Violations are liable for prosecution under the German Copyright Law. Springer is a part of Springer Science+Business Media springeronline.com © Springer-Veriag Berlin Heidelberg 2006 Printed in Germany The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Typesetting: Camera ready by author Cover design: Erich Kirchner, Heidelberg Printed on acid-free paper
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Preface
Almost all economic activities in modern societies are scattered through space and time. Transport processes, as a consequence, pervade everyday life and they have deep impact on economic and social prosperity. Today's standard of living would just be unthinkable in the absence of water or power supply systems; road, railway, and air traffic systems are virtually used by everyone; and many people even cannot imagine to live in a world without telecommunications networks — including television, telephony, and the Internet. All examples have some kind of a transport process in common, by which people, commodities, or just data are moved along the interconnections of a network. The purpose of this text is to provide an economic view on basic principles of transportation related network activities. In doing so the analysis is not restricted to certain types of transport networks at the outset and this requires a relatively simple production technology. In order to describe the behavior of groups of actors involved in the transport process, microeconomic theory suggests to distinguish between the provision of networks and of network services. Consequently, the analysis refers to at least one network carrier who offers a system of network components. On the basis of this network a second group of actors produces services and supplies them to the third group - the consumers - on the respective market. Having consumer sovereignty in mind, the principal question arises as to how to adjust the production structure of networks such that they fit best to th
