Full text   PDF | 1 MB

Knowledge, networks and economic activity: an analysis of the effects of the network on the knowledge-based economy

Joan Torrent-Sellens (

Lecturer, Economics and Business Studies, UOC

IN3 researcher, UOC


The progressive consolidation of a knowledge-based economy has caused network effects to become a focal point of analysis into the changes in behaviour evinced by economic agents. This article analyses the changes in production and demand for knowledge commodities arising from network externalities. The analysis reveals two distinct patterns of behaviour in knowledge-based economic activity. Observable knowledge commodities are governed by the effect of direct and indirect network externalities. Also, their demand curve and business strategy depend on new-user entry (marginal value) and the relative size of the network. However, tacit knowledge commodities are governed by learning network externalities and their demand curve and business strategies are dependent on the value generated by the addition of the goods themselves to the network (intrinsic value).


demand curve, industrial economy, information and communication technologies (ICTs), knowledge commodities, knowledge-based economy, network externalities

Submission date:  January 2009
Accepted in:  February 2009
Published in:  April 2009

Creative Commons License The texts published in this journal, unless otherwise indicated, are subject to a Creative Commons Attribution-Noncommercial-NoDerivativeWorks 2.5 licence. It may be copied, distributed and broadcast provided that the author and UOC Papers are cited. Commercial use and derivative works are not permitted. The full licence can be consulted on