Advancing media economics research through theory

In a 2008 essay Hollifield called for more “problem based” media economics research that goes beyond replicating diffusion studies. In the subsequent ten years, less than 50 percent of the articles published in the discipline’s two premier journals referenced or applied a specific theory. This chapter aims to correct that by reviewing two highly relevant but rarely applied approaches to media research: First-mover advantage and network effects. First-mover advantage considers the special case of competitive superiority that arises from market-entry timing and can result from a variety of factors including network effects. Network effects is a phenomenon where the value of a product or service is tied directly to the number of users and the availability of complementary goods. After reviewing each theory, the chapter offers suggestions for how it can be used to investigate some of the most critical issues in contemporary society.