Is Promoting Mobile Money Usage Consistent With Restricting Access to Phone Communication?: An Analysis of Direct and Indirect Network Effects in Mobile Money Adoption in Burkina Faso

Network effects of connected and autonomous vehicles in South Korea: A consumer preference approach

Direct and indirect network effects are equivalent: A comment on “Direct and Indirect Network Effects: Are They Equivalent?”

The role of prices and network effects in the growth of the iPhone platform

Mobile money adoption and household welfare in Uganda

Digital platforms operate in multisided markets providing services through the internet to two or more distinct groups of users, between which there are indirect network effects. Direct networks effects are frequently present within each group. Therefore, online platforms usually present both direct network effects, between individual members of the same group, and indirect network effects, between members of distinct groups. Network effects may simultaneously reduce competition leading to a greater concentration and strengthening entry barriers, on the one hand, and put forward significant efficiencies on the other. This article examines some keys aspects related to the impact of network effects on the assessment of mergers in two-sided markets, taking account of the recent practice of the Commission.

We investigate two competing products with network effects diffusion on heterogeneous Newman-Watts (HNW) network based on a computer simulation model. Consumerspsila behaviors in our model are determined not only by their individual preferences and purchasing resistances but also by their interactions with others. To analyze the determinant factors in products diffusion we divide network effects into two kinds - direct network effects and indirect network effects. The outcomes of simulations show that direct network effects act as a brake on the winner-take-all process, often lead to market sharing. Consumers in the market are cliquish and each faction adopts the same product when market sharing outcome occurs. Indirect network effects are great impetus on the winner-take-all process, but the winner-take-all process can be slowed for the heterogeneity of purchasing resistances among consumers.

We postulate that professional proximity due to common patients and geographical proximity among practice locations are significant factors influencing the adoption of health information exchange (HIE) services by healthcare providers. The objective of this study is to investigate the direct and indirect network effects of these drivers on HIE diffusion. Multi-dimensional scaling and clustering are first used to create different clusters of physicians based on their professional and geographical proximities. Extending the Bass diffusion model to capture direct and indirect network effects among groups, the growth of HIE among these clusters is modeled and studied. The network effects among the clusters are investigated using adoption data over a 3-year period for an HIE based in Western New York. HIE adoption parameters-external sources of influence as well as direct and indirect network coefficients-are estimated by the extended version of the Bass diffusion model. Direct network effects caused by common patients among physicians are much more influential on HIE adoption as compared with previously investigated social contagion and external factors. Professional proximity due to common patients does influence adoption decisions; geographical proximity is also influential, but its effect is more on rural than urban physicians. Flow of patients among different groups of physicians is a powerful factor in HIE adoption. Rather than merely following the market trend, physicians appear to be influenced by other physicians with whom they interact with and have common patients.

PurposeMobile money is a service in which the mobile phone is used to access financial services. Thus, the mobile money platform should be user-friendly with hedonic features that are attractive and pleasurable to the users. The main purpose of this paper is to establish the mediating effect of hedonism in the relationship between mobile money adoption and usage and financial inclusion of micro small and medium enterprises (MSMEs) in Uganda.Design/methodology/approachThis study reports interesting findings by using data obtained from MSMEs located in northern Uganda. The structural equation and measurement models were generated in analysis of moment structures (AMOS) to answer the hypotheses of this study.FindingsThe findings suggest that including hedonism in the model improves mobile money adoption and usage by 12.7 percentage points in order to promote financial inclusion of MSMEs in Uganda. Hedonism is found to affect mobile money adoption and usage, which in turn influences financial inclusion.Research limitations/implicationsThis study used cross-sectional data to document the mediating effect of hedonism in the relationship between mobile money adoption and usage and financial inclusion. The study analyzed mobile money adoption and usage, hedonism, and financial inclusion from the MSMEs owners' perspective. Future research could use relevant longitudinal data to verify multiple benefits of hedonism in enhancing mobile money adoption and usage as well as other potential digital financial technologies.Practical implicationsThis study categorically informs mobile telephone network operators and inventors of mobile money applications to invest more in developing pleasurable and user-friendly mobile money features that can attract more users. The digital financial services' application developers should design user-friendly mobile money applications that suit the needs of all users. This requires careful understanding of diverse attractive features of mobile money services.Originality/valueThis study offers direction to developers of mobile money applications to design pleasurable and user-friendly mobile money platform with features, which are attractive to the different users. Particularly, it highlights the role of hedonic motivation in promoting adoption and use of mobile money technology to increase the scope of financial inclusion of MSMEs in a developing country like Uganda. Indeed, the novelty in this paper is grounded on a blend of financial technology and psychology to promote financial inclusion in under developed economies.

PurposeDrawing from the argument that mobile money services have a significant potential to provide a wide range of affordable, convenient and secure financial services, there have been rampant frauds on consumers of financial products over the digital financial platform. Thus, this study aims to establish the mediating effect of digital consumer protection in the relationship between mobile money adoption and usage and financial inclusion with data collected from micro small and medium enterprises (MSMEs) in northern Uganda.Design/methodology/approachTo achieve the main objective of this study, a research model was developed to test for the mediating effect of digital consumer protection in the relationship between mobile money adoption and usage and financial inclusion. The data were collected from MSMEs and structural equation modelling in partial least square (PLS) combined with bootstrap was applied to analyze and test the hypotheses of this study. The direct and indirect effect of mobile money adoption and usage on financial inclusion was tested through digital consumer protection as a mediator variable.FindingsThe findings from the PLS-structural equation modelling (SEM) showed that mobile money adoption and usage has both direct and indirect effect on financial inclusion. Moreover, financial inclusion is influenced by both mobile money adoption and usage and digital consumer protection.Research limitations/implicationsThe study used partial least square (PLS-SEM) combined with bootstrap confidence intervals through a formative approach to establish the mediating effect of the mediator variable. Hence, it ignored the use of covariance-based SEM and the MedGraph programme. Furthermore, data were collected from samples located in Gulu district, northern Uganda and specifically from MSMEs. This limits generalization of the study findings to other population who also use mobile money services.Practical implicationsPromoters of digital financial services, managers of telecommunication companies, and financial inclusion advocates should consider strengthening the existing digital consumer protection laws on the mobile money platform. A collaborative approach between the mobile network operators, financial institutions and regulators should tighten the existing laws against mobile money fraudsters and an efficient mechanism for recourse, compensation and remedy should be set up to benefit the victims of frauds and cybercrime on the Fintech ecosystem.Originality/valueThe current study gives a useful insight into the critical mediating role of digital consumer protection as a cushion for promoting financial inclusion through mobile phones over the Fintech that face great threat and risk from cyber insecurity.

The study was carried out on family enterprises in Ekiti state during COVID-19 Lockdown: to identify socio-economic characteristics of the family enterprises; to determine the types of mobile money adopted; to determine the factors influencing the types of mobile money adopted; and to examine the effect of mobile money adopted on the performance of family enterprises during COVID-19 lockdown in Ekiti state. The study administered questionnaire on one hundred and fifty (150) respondents and retrieved one hundred (100) which was used for the analysis of this study using SPSS (Statistical Package for the Social Sciences). Findings from the study shows that majorities of the respondents had Diploma and Degree as their highest certificate. The nature of the family enterprises considered are publishing and printing, metal and aluminum fabrication, poultry and fishery farming and furniture, upholstery and carpentry, leather shoe making, graphic designer, automobiles mechanic and panel beaters, Gas seller, tailoring/fashion designer, and dry cleaners. Findings from the study further shows that the enterprises were self-started, owned through inheritance and while the remaining were acquired. The study findings show the factors that are influencing the adoption of mobile money by family enterprises in Ekiti State such as: perceived electronic fraud among the family enterprises discourages mobile money adoption; perceived ease of use of mobile money among the family enterprises encourages the adoption of mobile money; perceived low cost of service of use of mobile money among the family enterprises encourages the adoption of mobile money; perceived usefulness of mobile money among the family enterprises encourages the adoption of mobile money; low level of knowledge about mobile money (high level of illiteracy) among others. Findings further shows that mobile money adopted by the family enterprises are significantly influencing their performance in Ekiti State Nigeria. The study concluded that family enterprises considered are micro scales, and mostly adopted USSD (unstructured short messages) and mobile app including online banking as mobile money adopted by the selected family enterprises. The enterprises used the mobile money adopted for different transactions such as payment of salaries, products bought from suppliers, payment received on products/services sold/rendered to their customers. The study further concluded that the index factors considered in this study are cogent factors that are really influencing the adoption of mobile money. The study also concluded that mobile money adopted are significantly influencing the performance of the selected family enterprises during COVID-19 Lockdown in Ekiti State Nigeria.

A firm’s business model accounts for direct and indirect network effects, where the network size is a key enabler of value creation and appropriation. Additional conception of a business network’s contribution is provided by a recent advancement of the theory of data network effects, where machine learning is used to analyze large data sets to learn, predict, and improve. The more learning there is, the more value is generated, producing ever more data and learning and creating a virtuous circle. For the first time, this study combines the theory of data network effects with business model theory. The contribution lies in extending a business model’s lock-in effects through direct and indirect network effects to encompass data network effects. This paper provides a case study that supports the theoretical advancement and illustrates how this form of machine learning can increase profitability while reducing negative ecological impacts in an industrial context.

Although e-commerce in general and platform business models in e-commerce report steadily increasing revenues, establishing e-commerce ecosystems is not a guaranteed success per se. Potential platform owners must carefully plan the ignition of the ecosystem to reach a critical mass of customers. This critical mass is crucial for the platform to benefit from direct and indirect network effects. However, research so far has not provided clear guidance and strategies on how to successfully establish ecosystems in e-commerce. Therefore, we evaluated and demonstrated generic platform ignition strategies in e-commerce. Our evaluation is thereby based upon an established mathematical model for two-sided markets considering utility gains from indirect network effects and costs. The heterogeneity of the individual market sides is reflected in the form of sigmoidal distribution functions. Applying this model, we show that subsidies, seeding, marquee, single side, micro market, piggybacking, opening up, and big bang marketing are potential strategies for reaching a critical mass of participants in e-commerce ecosystems. We provide guidance for practitioners on how to establish successful e-commerce ecosystems. We contribute to the body of knowledge strategies in e-commerce ecosystems by bridging critical mass and network effects.

Some people expect to see small and medium enterprises (SMEs) benefit substantially from using mobile money (MM). SMEs are often seen to process large numbers of payments and can have a surprising amount of money flowing through them. At the same time, their need for payment and transactional services are not always well served by traditional banks. They do not always find it easy or cost effective to adopt a full-featured package of banking services as a larger business might. Anecdotal evidence seems to confirm that many small businesses use MM intensively in markets where it is available; however, the phenomenon is not well documented or researched. In response, in late 2011, we conducted a survey of 865 SMEs in Kenya to better understand MM adoption patterns in one of the most active markets in the world.We find that whether Kenyan SME owners use MM to pay utility bills or salaries or suppliers, they are driving higher volumes of both MM adoption and transactions. Our data show that of the 865 SME owners who responded, 861 (99.5%) used MM in their personal or business dealings, and 67% used it for business. SMEs are intensive users compared to consumers; 80% report using MM once per week or more, whereas the average usage in Kenya is closer to twice a month. SMEs also appear to promote viral adoption along the supply chain; many say they adopted it because clients or suppliers asked them to. For these reasons SMEs should be a critical market segment for mobile network operators who seek to make MM usage pervasive across the value chain from consumers, to merchants, to suppliers.We also found that while MM use by SMS is widespread, it is not yet deep and SMEs are not yet “closing the e-loop.” Most SMEs use MM on a one-off basis and do not actively promote MM at the point of sale. In particular, SMEs are not yet closing the e-loop by receiving large volumes of retail transactions electronically and then paying out to employees in electronic value – both retail transactions and wage payments were predominantly cash. We did find that 28% reported accepting MM retail payments, a figure we found higher than expected given the high pricing of transactions and lack of a convenient interface. Enticing SMEs and other businesses to close the loop will be a major part of the endgame for MM operators who hope to move toward a cash-light world.Finally, our survey found several barriers that have prevented people from using MM. Specifically, respondents cited high tariffs and inadequate access to record-keeping and payment-management interfaces as main barriers to adoption. In order to make MM ubiquitous, MM providers and their partners will need to keep an eye on cost and convenience and offer value-added services beyond the transaction.

The existence of network effects not only changes traditional product diffusion patterns but also has significant impacts on individuals’ decision behaviors. Previous studies on competitive product diffusion have focused on macro-level diffusion speed and effects while neglecting the micro-level impacts of individual heterogeneity and social interaction on product diffusion. This paper introduces the individual heterogeneities and social interactions of consumers into the competitive product diffusion model on the basis of a two-sided market framework and complex network theory. We proposed a small world network model and behavioral game theory. Specifically, the small world network model was used to build interactions between users, and behavioral game theory was utilized to describe the interactions between users. In our model, the direct network effect was distinguished from the indirect network effect on the basis of the synergy of multiple complementary products. The results show that the final distribution often presented a situation wherein two products coexisted, but the market share was very different. In an asymmetric first-mover situation, the direct network effect dominated the indirect network effect. Moreover, the dominant position of one product at present can be changed by the other under certain conditions. Finally, when the switching and learning costs were high, the market maintained its concentration, and the prior platform was unable to dominate the market. A decrease in the costs raised the prior platform’s market share and the speed of market occupation.

Expectations about stand-alone and network benefits determine the adoption decision of customers and hence the diffusion of standards. To increase the number of adopters of a communication standard like EDI, not only the ability to exchange messages (as a source of direct network effects), but also the provision of complementary services such as standardized master data, e.g., by establishing a central, industrywide EDI data pool (as a source of indirect network effects) is important. We thus examine the differing impact of direct and indirect network effects on the adoption and diffusion of communication standards. The incorporation of both network benefits into an agent-based simulation model may help to better understand the underlying diffusion problem.