Metcalfe’s Law – Explained

Academic Research on Metcalfe’s Law   Metcalfe’s law, Web 2.0, and the Semantic Web, Hendler, J., & Golbeck, J. (2008). Metcalfe’s law, Web 2.0, and the Semantic Web.Web Semantics: Science, Services and Agents on the World Wide Web,6(1), 14-20. This article discusses how putting a linked semantic web, and social networks together can help bolster the power of the Web using Metcalfes law. Metcalfe’s lawis wrong-communications networks increase in value as they add members-but by how much?, Briscoe, B., Odlyzko, A., & Tilly, B. (2006). Metcalfe’s law is wrong-communications networks increase in value as they add members-but by how much?.IEEE Spectrum,43(7), 34-39. This paper argues that Metcalfe’s law, which states that the value of a communications network is proportional to the square of the number of its users, is incorrect. The paper discusses the fundamental flaw of Metcalfe’s law and describes how Zipf’s law can be used as basis to justify the n log(n) rule-of-thumb valuation of a general communications network of size n. That sneaky exponentialBeyondMetcalfe’s lawto the power of community building, Reed, D. P. (1999). That sneaky exponentialBeyond Metcalfes law to the power of community building.Context magazine,2(1). Metcalfe’s law: A network becomes more valuable as it reaches more users., Metcalfe, B. (1995). Metcalfe’s law: A network becomes more valuable as it reaches more users.Infoworld,17(40), 53-53. This study observes that a computer network becomes valuable as it reaches more users. The basis of the observation is on George Gilder’s book `Telecosm’. This study also analyses the risk of accepting George Gilders observation of computer networks as true. A refutation ofMetcalfe’s Lawand a better estimate for the value of networks and network interconnections, Odlyzko, A., & Tilly, B. (2005). A refutation of Metcalfes Law and a better estimate for the value of networks and network interconnections.Manuscript, March,2, 2005. This paper evaluates the arguments which states that the Metcalfes law is significantly an overestimate. This note presents several quantitative arguments that suggest the value of a general communication network of size n grows like n log(n). Tencent and Facebook data validateMetcalfe’s Law, Zhang, X. Z., Liu, J. J., & Xu, Z. W. (2015). Tencent and Facebook data validate Metcalfes Law.Journal of Computer Science and Technology,30(2), 246-251. In this paper, the authors expand Metcalfes results by utilizing the actual data of Tencent (Chinas largest social network company) and Facebook (the worlds largest social network company). Networks, noise and navigation: sustainingMetcalfe’s lawthrough technological innovation, Windrum, P., & Swann, G. P. (1999). Networks, noise and navigation: sustaining Metcalfe’s law through technological innovation. The paper examines the relationship between network externalities and the value of the World-Wide Web. Metcalfe’s lawpredicts reduced power of electronic medical record software, Valdes, I., Kibbe, D., Tolleson, G., Kunik, M., & Petersen, L. A. (2003). Metcalfes law predicts reduced power of electronic medical record software. InAMIA Annual symposium proceedings(Vol. 2003, p. 1038). American Medical Informatics Association. Error reduction, quality improvement and lowering of cost can all be achieved through electronic integration of health care providers. Despite the existence of clinical computing software for decades, meaningful linkage between health care providers has not occurred. This study hypothesizes that a major reason is reduction in network value through incompatible clinical software among hundreds of health care entities. Metcalfe’s lawand operational, analytical and collaborative CRM-using online business communities for co-creation, Alavi, S., Ahuja, V., & Medury, Y. (2012). Metcalfe’s law and operational, analytical and collaborative CRM-using online business communities for co-creation.Journal of Targeting, Measurement and Analysis for Marketing,20(1), 35-45. The study segments consumers using hierarchical cluster analysis into groups to identify consumer co-creators. Empirical validation ofMetcalfe’s law: How Internet usage patterns have changed over time, Madureira, A., den Hartog, F., Bouwman, H., & Baken, N. (2013). Empirical validation of Metcalfes law: How Internet usage patterns have changed over time.Information Economics and Policy,25(4), 246-256. This paper explores the concept of Digital Information Networks (DINs) such as the Internet, and their impact in the modern day era. This paper develops a framework that identified 13 different ways (capabilities) how users convert information into economic value. The paper show a simple quadratic relation (Metcalfes law) can be used to quantify how adequate these capabilities are in converting the ability to access information into economic value. Digital blockchain networks appear to be followingMetcalfe’s Law, Alabi, K. (2017). Digital blockchain networks appear to be following Metcalfes Law.Electronic Commerce Research and Applications,24, 23-29. This paper presents an analysis of some of the recent blockchain networks to determine if they satisfy Metcalfes Law. The Bitcoin, Ethereum, and Dash networks were analyzed. The analysis shows that the networks were fairly well modeled by Metcalfe’s Law, which identifies the value of a network as proportional to the square of the number of its nodes, or end users. Economic sense ofMetcalfe’s Law, Li, G. (2008). Economic sense of Metcalfes Law. This paper connects Transaction Cost Theory (TCT) with Metcalfes Law. It not only proves that they are consistent but also makes economical sense of the Law by introducing the second critical mass in to Metcalfes Law. Efforts are also used to explain exiting Web effect and future of Web evolutions. It concludes that any format of the future Web evolution has to have cost reduction in its core.