@unpublished {61,
	title = {Death through Success: The Rise and Fall of Local Service Competition at the Turn of the Century},
	year = {2011},
	abstract = {This paper develops a model of delayed network effects to explore the curious dynamics of competition in the local telephone market between AT\&amp;T and the {\textquoteright}Independents{\textquoteright} at the turn of the century. In the early years of telephone diffusion, local service competition between these two non-interconnected networks became widespread, but declined rapidly when diffusion rates started to slow down after 1907. The analysis is based on the observation that urban markets subdivide into social {\textquoteright}islands{\textquoteright} along geographical and socio-economic dimensions: users are more likely to communicate with subscribers {\textquoteright}inside{\textquoteright} their island than with those {\textquoteright}outside{\textquoteright} it. A simple dynamic model demonstrates how minority networks can thrive and preserve their market share at a low state of development when islands form essentially independent niche markets. As the industry matures, these niches {\textquoteright}grow{\textquoteright} together and standardization occurs. The implications of the model are confirmed using a small panel data set of US cities.},
	author = {Markus Mobius}
}
