Sebastian M. Maurer and Bernardo A. Huberman
Abstract
We present a dynamical model of web site growth in order to explore the
effects of competition among web sites and to determine how they affect
the nature of markets. We show that under general conditions, as the
competition between sites increases, the model exhibits a sudden
transition from a regime in which many sites thrive simultaneously, to a
"winner take all market" in which a few sites grab almost all the users,
while most other sites go nearly extinct. This prediction is in
agreement with recent measurements on the nature of electronic markets.
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