System Size, Lock-in and Network Effects for Patient Records

Interoperability and Networks, the Internet, and Cloud Computing

Article Snapshot

Author(s)

Amalia R. Miller and Catherine Tucker

Source

NET Institute Working Paper #09-07, September 2009

Summary

This paper studies the relationship between firm size, network effects and lock-in.

Policy Relevance

Interoperability may not be a sufficient condition for spreading use of a network feature. Instead policy makers need to take into account the strategic lock-in decisions of users of a that feature. This is of particular relevance to making policy about sharing health records across the national health information network.

Main Points

  • The authors use the example of the sharing of electronic medical records by patients to examine the relationship between firm size, network effects and lock-in.

  • Network users that are large in size have previously been associated with a greater internalization of network effects.

  • However, large firms are less likely to share data across the network to external parties.
    • This is more pronounced for firms where their customers are more likely to leave and for firms that spend more money in attracting customers.

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