Modeling Dynamic ICT Services Markets

ICT services markets function as an arena for deployment and diffusion of new ICT services. Such markets are characterized by dynamic and temporal competition between the providers of ICT services. New service providers enter the market as others fail to generate enough profit and leave the market, while market leaders often come and go as the market evolves. In this paper we propose a modeling framework focusing on the temporal characteristics of competition among multiple service providers in dynamic ICT markets. Market properties that are discussed and quantified include network effects, positive feedback and churning. First, we provide an analytical model for a market with two competing service providers. Then, a simulation based case study of the market for social network services using the proposed market model is presented. Simulation results illustrate different evolution scenarios.