Network Effects in the Demand for Cigarettes

Abstract

This paper examines micro-economic incentives for smoking cigarettes. The key aspect considered is network effects, and how they can help explain the demand for cigarettes. Common examples of network industries include telephone, email, computer hardware and, computer software. A network effect is generally defined as a feature of a market that causes demand for a good or service to be dependent on the amount of people using that good. The most common example of a market affected by network effects is in the market for telecommunication services and telecommunication products. It is easy to imagine that the utility of a telephone would be quite low if no one else had one; and as other people begin to purchase telephones, the utility increases. This effect is called a consumption externality, which is the most common form of a network effect.

First Advisor

Professor Matt Warning

Date of Completion

Fall 2006

Degree Type

Thesis

Format

PDF

URI

http://soundideas.pugetsound.edu/economics_theses/38

Language

English

Department

Economics

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