From: Robin Hanson (hanson@econ.berkeley.edu)
Date: Wed Mar 03 1999 - 17:25:20 MST
On 1/26/99 EST, T.0. Morrow wrote:
>>Paul Krugman is a very good economist.
>>
>>Robin Hanson
>
>Take my comments with as much salt as you like, given that I tout no formal
>degrees in economics, but think that Krugman fairly well botched the "network
>externalities" issue. The mere fact that he calls them "externalities"
>reveals error. Liebowitz & Margolis convincingly argue that "network
>*effects*" more properly fits the phenomena. We amatuers may regard that as
>an arcane distinction, but surely professional economists should use
>consistent and accurate terminology.
>
>Krugman has moreover made highly suspect and hotly controverted claims of
>having pioneered the idea of network effects, has bought into the QWERTY myth
>too uncritically, and has failed to revisit his views in the face of new and
>contradictory evidence.
Searching for "Liebowitz Margolis network effects" at AltaVista gets me this
10/98 CATO policy analysis: http://wwwpub.utdallas.edu/~liebowit/cato.html
Their only mention of Krugman is: "The most commonly cited example in the
network-externality, path-dependence literature is the prosaic typewriter
keyboard. The importance of this example can be gleaned from Paul Krugman's
1994 book `Peddling Prosperity.' In that book Krugman speaks glowingly of
this entire literature in a chapter entitled "The Economics of QWERTY." He
does, however, appear to have altered his views when made aware of the facts
presented below."
These authors don't complain about the phrase "network externality", and I
see no reason to complain either. Krugman did pioneer their use in a
particular context, and he did admit that he'd been tricked by the QWERTY
story.
Robin Hanson
hanson@econ.berkeley.edu http://hanson.berkeley.edu/
RWJF Health Policy Scholar FAX: 510-643-8614
140 Warren Hall, UC Berkeley, CA 94720-7360 510-643-1884
after 8/99: Assist. Prof. Economics, George Mason Univ.
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