Dynamic Analysis of the Effect of Network Externality in Vertically Differentiated Market Hyung-Rae Cho․Minho Rhee † Dept. of Industrial Systems Engineering/ERI, Gyeongsang National University

조형래(Hyung-Rae Cho):이민호(Minho Rhee) 한국산업경영시스템학회 2019 한국산업경영시스템학회지 Vol.42 No.2

Network externalities are essentially dynamic in that the value consumers feel about a product is affected by the size of the existing customer base that uses that product. However, existing studies on network externalities analyzed the effects of network externalities in a static way, not dynamic. In this study, unlike previous studies, the impact of network externalities on price competition in a vertically differentiated market is dynamically analyzed. To this end, a two-period duopoly game model was used to reflect the dynamic aspects of network externalities. Based on the game model, the Nash equilibria for price, sales volume, and revenue were derived and numerically analyzed. The results can be summarized as follows. First, if high-end product has strong market power, the high-end product vendor takes almost all benefits of the network externality. Second, when high-end product has strong market power, the low-end product will take over most of the initial sales volume increase. Third, when market power of high-end product is not strong, it can be seen that the effects of network externalities on the high and low-end products are generally proportional to the difference in quality. Lastly, if there exists a strong network externality, it is shown that the presence of low-end product can be more profitable for high-end product vendor. In other words, high-end product vendor has incentive to disclose some technologies for the market entrance of low-end product, even if it has exclusive rights to the technologies. In that case, however, it is shown that the difference in quality should be maintained significantly.

『소년』의 과학

조형래 ( Hyung Rae Cho ) 국제한국문학문화학회 2009 사이 Vol.6 No.-

개항 이후 서구의 발달된 과학·기술 지식이 조선 내부에 대대적으로 유입되었지만 과학이라는 개념의 정립 및 그 실천과 관련하여 중대한 전환점이 되었던 것은 특히 1900년대 초반이었다. 특히 「소년」은 `과학`을 당시의 중요한 학지(學知)로서 취급하고 있었던 유력한 잡지 중 하나였다. 이것은 서구 사회의 고유한 전통과 문화를 반영하고 있는 특수한 학제이자 실천으로서의 사이언스의 번역어로서 카가쿠(科學)라는 말이 일본에 정착되고, 일본의 대학제도 내부에서 과학의 제반 학과가 설치되고 있었던 상황과 무관하지 않았다. 『소년』에서 주로 `이과`로 나타나고 있는 과학이란 무엇보다도 실험이라는 고유한 실천 및 진리생산 및 사실재현을 위한 정교한 글쓰기의 형식을 도입·정립했다고 할 수 있다. 그것은 당대의 조선인들로 하여금 자연과 세계의 객관적인 인식을 가능하도록 하는 기준을 제공했다. 뿐만 아니라 그것은 생물의 하위범주로서 인간을 자연 내부에 정위하는, 인간정신의 보편화에 관한 인식론적 전회와 관련되어 있다. 어떤 의미에서 과학이란 정의 만족과 관련된 1910년대 조선의 문학론의 탄생과 전혀 무관하지 않은 담론이었다. Since 1876, it had been an extensive flux of scientific and technical knowledge from the West into Cho-sun. But the important times for the establishment and revolution on that concepts in Korea was the early of 1900`s. Especially a word `과학` was treated as modern scholarship in So-nyun(the Young). This is a translation of very science that is the principle and practice of study represented historical traditions, experiences and cultures of the west And it was translated as Japanese Kagaku(科學) that introduced as study and education system into the society at that time. These were related with the beginning of modern science in Korea and with So-nyun first of all. In this children`s magazine it was mainly called a word `이과` that could make a particular practice of an experiment and a form of ecriture for production of truth and representation of experience. Also it offered to Korean some standardization for objective recognition of nature and world. Futhermore it considered a man to a part of nature, and then universalized human mental. This caused very important epistemological conversion about understanding nature and world. In a manner of speaking, science as episteme had concerned with discourses on the birth of literature as the satisfaction of sense in 1910`s Korea.

수직적으로 차별화된 시장 하에서 망외부성이 미치는 영향에 대한 동태적 분석

조형래,이민호,Cho, Hyung-Rae,Rhee, Minho 한국산업경영시스템학회 2019 한국산업경영시스템학회지 Vol.42 No.2

Network externalities are essentially dynamic in that the value consumers feel about a product is affected by the size of the existing customer base that uses that product. However, existing studies on network externalities analyzed the effects of network externalities in a static way, not dynamic. In this study, unlike previous studies, the impact of network externalities on price competition in a vertically differentiated market is dynamically analyzed. To this end, a two-period duopoly game model was used to reflect the dynamic aspects of network externalities. Based on the game model, the Nash equilibria for price, sales volume, and revenue were derived and numerically analyzed. The results can be summarized as follows. First, if high-end product has strong market power, the high-end product vendor takes almost all benefits of the network externality. Second, when high-end product has strong market power, the low-end product will take over most of the initial sales volume increase. Third, when market power of high-end product is not strong, it can be seen that the effects of network externalities on the high and low-end products are generally proportional to the difference in quality. Lastly, if there exists a strong network externality, it is shown that the presence of low-end product can be more profitable for high-end product vendor. In other words, high-end product vendor has incentive to disclose some technologies for the market entrance of low-end product, even if it has exclusive rights to the technologies. In that case, however, it is shown that the difference in quality should be maintained significantly.

게임이론을 이용한 자체브랜드 제품의 가격 및 품질전략 분석

조형래(Hyung-Rae Cho),이민호(Minho Rhee) 한국산업경영시스템학회 2011 한국산업경영시스템학회지 Vol.34 No.3

Recently, the increasing power of distributors has given them the opportunity of introducing private brand (PB) products. Based on the game theory, this study analyzes the decision making of a distributor regarding the optimal pricing and quality strategies for the PB product. By analyzing the game model, it is shown that the pricing mechanism heavily depends not only on the market power of the distributor but on the quality of the PB product. It is also shown that, counter intuitively, as the market power of the distributor increases, the optimal quality of the PB product should be decreased.

학업면려와 방탕무뢰의 토포그래피

조형래(Cho, Hyung Rae) 동악어문학회 2016 동악어문학 Vol.66 No.-

이 글은 1900년대 도쿄에서 간행된 유학생 학회지를 중심으로 조선 출신의 청년 유학생들이 도쿄에서 학업 외의 일상과 여가를 영위했던 구체적 양상에 대해 공간적으로 재구성하고자 했다. 이를 통해 궁극적으로 그들이 공공연하게 표방했던 학업면려-애국애족의 제유 이면에 자리하고 있었던 무의식의 조건과 관련된 또 다른 가능성의 중심을 확인하는 것을 목적으로 하고 있다. 그들은 일차적으로 기울어져 가는 국운을 근심하며 학업에 매진했고, 이를 통해 얻어진 각종 지식과 견해를 여러 유학생 학회지의 지면에서 적극적으로 개진했다. 그러나 이러한 공적인 의미로 일원화되지 않는 유희와 생활과 행적에 관한 단편적인 기사와 논설 또한 존재했다. 그들은 당시 도쿄제국대학 일대를 중심으로 한 홍고의 문화권에 주로 거주했고, 오쿠보 공원에서 원족회-운동회를 개최했으며, 오모리의 해수욕장에서 물놀이를 즐겼을 뿐만 아니라, 우에노나 아사쿠사의 공원을 견학하거나 산책했다. 그것은 메이지 말엽까지 도쿄 및 근교에 조성된 대학가, 철도, 해수욕장, 공원 등 기반 시설과 명소 및 근대도시로의 개편과정에 의한 권역 별 구획을 통해서 구체적으로 체험될 수 있었던 것이었다. 그들은 문명개화한 이국의 대도시 도쿄의 다양한 명소와 볼거리에 시선을 빼앗기고 일탈의 가능성을 시사하거나 반대로 공공연하게 그러한 매혹을 절제하려는 뜻을 애써 표명하기도 했다. 하지만 그들로서는 도쿄라는 이국의 문명개화한 대도시의 외관 자체를 목도하고 동경하는 것 자체만으로도 벅찼다. 따라서 학업면려 자체 또는 해수욕 및 명소 관광에 대해 휴식이나 견학의 의미를 부여하는 것 외에 가능했던 것은 대도시의 요염한 미관으로부터 일정한 거리를 유지한 채 공원을 산책하거나 방안에 틀어박혀 그 어디에도 속하지 못하는 스스로의 처지를 반추하는 일이었다. 각양각색의 장소 및 일상, 생활양식에 대한 문화적 체험에 매료되고 또한 거리를 두는 긴장과 교착이 이와 같은 글쓰기를 통해 반복되는 과정 속에서 내면이라는 근대적 개인을 형성하는 핵심적 성분이 그 실체를 드러내게 되었던 것이다. 그리고 이러한 과정을 통해 어디에도 속하지 않고 거리를 둘 수 있는 개인적 장소가 포착, 발견되었다. First, this study aims to reconstruct concrete aspects of Korean students"s daily life and leisure on several articles of journals published by their academies in 1900"s Tokyo. And the main purpose is to find a special possibility beyond their general sense of duty as studying hard to civilize Korea. Korean students studying in 1900"s Tokyo encouraged learning on modern sciences each other as the alternative resolution recovering a national sovereignty. And then, from that learning they expressed new knowledges and thoughts on articles of journals pushfully. But another kind of short articles were written by them on experiences as their play, lifestyle and moving route. According to these, they mainly lived in the cultural area of Hongo around Tokyo imperial university, which sometimes had an athletic competition at Okubo park or swam at the Omori bathing resort, and often took a walk in Oeno or Asakusa park. The lifestyle could be concretely experienced them by the improvement and development of the modern urban environment as construction of railroads, pleasure resorts and infrastructures etc. Those students attracted by tourist attractions and spectacles of modern Tokyo furthermore deviate from standard of students studying abroad and vise versa. But it was enough for them to observe and yearn for the voluptuous beauties of the modern, large city. Therefore they had to be considered and ruminated on their loneliness through taking walk in a park or penning themselves up in a room. Their interiority as modern individual was discovered through their writing, between fascination or dislike to various places, aspects of everyday and lifestyles.

B&M 유통업체와 C&M 유통업체 간의 가격경쟁 분석

조형래(Hyung-Rae Cho),류정섭(Jung-Sub Yu),차춘남(Chun-Nam Cha) 대한산업공학회 2002 대한산업공학회지 Vol.28 No.4

게임이론을 이용한 자체브랜드 제품의 가격 및 품질전략 분석

조형래(Hyung-Rae Cho),이민호(Minho Rhee) 한국산업경영시스템학회 2011 한국산업경영시스템학회 학술대회 Vol.2011 No.-

Recently, the increasing power of distributors has given them the opportunity of introducing private brand (PB) products. Based on the game theory, this study analyzes the decision making of a distributor regarding the optimal pricing and quality strategies for the PB product. By analyzing the game model, it is shown that the pricing mechanism heavily depends not only on the market power of the distributor but on the quality of the PB product. It is also shown that, counter intuitively, as the market power of the distributor increases, the optimal quality of the PB product should be decreased.

오프라인 소매점의 모바일 할인 서비스에 대한 전략적 분석

조형래(Hyung-Rae Cho),이민호(Minho Rhee) 한국산업경영시스템학회 2016 한국산업경영시스템학회지 Vol.39 No.3

The proliferation of the Internet and related technologies has led to a new form of distribution channels, namely online retailers. The conventional offline and the new online retailers have different transaction costs perceived by the consumers in the following perspectives: the accessibility to the product information, the traffic cost and the opportunity cost for the time to visit the store, the delivery time and the possibility of ‘touch and feel’ to test the quality of the product. In particular, the online retailers have lower distribution cost structure in that they do not have physical stores, which results in lower selling price. Thus they continuously offer price competition against offline retailers using the lower selling cost as competitive weapon. Moreover the emergence of the social commerce is likely to intensify the competition between the online and offline retailers. To survive in this fierce competition, the offline retailers are trying to defend their business interests by sticking to offline transaction in anticipation of increased customer loyalty, customer’s preference for ‘touch and feel’ style shopping, and others. Despite of these efforts, customers who touch and feel a product in an offline store but purchase the product through an online retailer are increasing. To protect such customers, recently, some of the offline retailers began to provide the mobile discount service (MDS) which enables the offline customers to purchase a product at a discounted price through the mobile applications. In business competitions, the price discount strategy is usually considered to secure more market share at the cost of lower profit. In this study, however, we analyze the effect of MDS as a weapon for securing more profit. To do this, we set up a game model between the online and offline retailers which incorporates the effect of the MDS. By numerically analyzing the Nash equilibrium of the game, some managerial implications for using the MDS for more profit are discussed.

Effect of Network Externality on the Price Competition in Vertically Differentiated Market

조형래(Hyung-Rae Cho),이민호(Minho Rhee) 한국산업경영시스템학회 2021 한국산업경영시스템학회지 Vol.44 No.1

The information products dramatically reduce the production costs of vertically differentiated products. Information products are also more likely to be affected by network externalities. Thus the proliferation of digital products is increasing the interests in network externality and vertical product differentiation. In step with this trend, the impact of network externalities on price competition in vertically differentiated markets has been continuously studied. Existing studies related to this topic have assumed that network externalities increase consumers willingness to pay per unit quality. The results show that higher quality products are affected more by network externality. However, network externality is essentially a concept affected by the size of the consumer, not a concept associated with quality. In this work, unlike previous studies, we present a new market model that reflects the essential definition of network externality. Based on the proposed market model, we derive both simultaneous and sequential Nash equilibria and analyze them numerically. The main results obtained from the analysis can be summarized as follows. First, network externalities primarily increase the demand for low-quality products and have a secondary impact on the demand for high-quality products. Second, the larger the quality difference between products, the more profitable they are. It also has been shown that sequential pricing methods are more advantageous in terms of revenue than simultaneous pricing method.

Analysis of Vertical Differentiation Strategy of a Monopolistic Company under Network Externality

Hyung-Rae Cho(조형래),Minho Rhee(이민호) 한국산업경영시스템학회 2018 한국산업경영시스템학회지 Vol.41 No.2

The proliferation of information technologies made it possible to produce information products of different versions at much lower cost comparing to traditional physical products. Thus it is common for information product manufacturers to consider vertically differentiated product line for more profit through improved market coverage. Another salient characteristic of most information product is network externality. Existing researches dealing with vertical differentiation and network externality usually assumed oligopolistic market where vertically differentiated products are provided by competing companies, respectively. Moreover, they analyzed the essentially dynamic characteristic of network externality statically. In this study, different from the previous researches, the vertical differentiation strategy of a monopolistic company under network externality is dynamically analyzed. We used a two-period model to accommodate the dynamic feature of network externality. Based on the two-period model, the profit maximizing solutions are analyzed. The results showed that a monopolistic company has no incentive to differentiate products vertically when the network externality is absent. On the contrary, when the network externality exists, the monopolistic company can derive more profit by vertically differentiating the product line. It is also shown that, for more profit, the monopolistic company should keep the quality difference between the high quality product and the low quality product as greater as possible.