Monopoly theory has incorporated network effects as a source of monopoly power
Modern economic and monopoly theory incorporates network effects as a central source of market power and competitive advantage for digital platforms.
The retrieved literature consistently points out that network effects are key drivers of market power, pricing capability, and platform dominance, aligning with the claim that monopoly theory incorporates network effects as a source of market power.
K. Shakhnov, Luana Zaccaria. Utility Tokens, Network Effects, and Pricing Power. 2023. https://doi.org/10.1287/mnsc.2023.4917
Paper 2 demonstrates how platform profitability and pricing power are driven by the intensity of network effects in digital markets.
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G. S. Rakhimova, Almaz R. Galyaviyev. ECONOMICS OF DIGITAL PLATFORMS: PRICING AND MONETIZATION MODELS UNDER NETWORK EFFECTS. 2025. https://doi.org/10.36871/ek.up.p.r.2025.05.08.022
Paper 3 highlights how classical pricing models are replaced by strategies driven by network effects in digital platforms.
Victorine Verlooy, Vincent Heimburg, Maximilian Schreieck, Manuel Wiesche. Power contestation and regulation in digital platform ecosystems—The case of the EU’s Digital Markets Act. 2026. https://doi.org/10.1007/s12525-025-00858-9
Paper 7 discusses how dominant platform owners leverage network effects and market power to maintain their positions.
Abulibdeh R, Crowson MG, Douglas MJ, Ramos M, Saillant NN, Celi LA. A problem of Epic proportion.. 2026. https://doi.org/10.1371/journal.pdig.0001143
Paper 8 notes that network effects are reinforcing mechanisms that entrench the market dominance and monopoly power of digital platform providers.
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