Abstract
Network services often exhibit positive and negative externalities that affect users' adoption decisions. One such service is user-provided or UPC. The service offers an alternative to traditional infrastructure-based communication services by allowing users to share their home base connectivity with other users, thereby increasing their access to connectivity. More users means more connectivity alternatives, i.e., a positive externality, but also greater odds of having to share one's own connectivity, i.e., a negative externality. The tug of war between positive and negative externalities together with the fact that they often depend not just on how many but also which users adopt make it difficult to predict the service's eventual success. Exploring this issue is the focus of this paper, which investigates not only when and why such services may be viable, but also explores how pricing can be used to effectively and practically realize them.
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