PACIS 2019 Proceedings


It has been said that many ICT related services such as SNS have network externality. It has also been said that the network externality has the chilling effect and a service cannot gain many users at the start-up stage, which means that the service providing firm must keep investing even if it does not have enough income at its start-up. This chilling effect can be explained by agent models. It is also known that agent model has the feature of phase transition. In this paper, we investigate the effect of the phase transition and its relation to the chilling effect. It is shown that there is no chilling effect under the process of phase transition while keeping other features of externality such as fixed shares. This implies that a service providing firm can obtain large number of users at the start-up stage with taking the advantage of the fixed share.