Researchers: Metcalfe's Law overshoots the mark

Bad analysis?: ?If Metcalfe's Law were true, there would have been tremendous economic incentives to accelerate network mergers that in practice take place slowly. ?Metcalfe's Law provides irresistible incentives for all networks relying on the same technology to merge or at least interconnect.? ?

I don?t think so. Metcalf?s law actually provides a huge disincentive for large networks to incorporate smaller networks. Consider the following.
Suppose I have 10 devices and I connect to a network with 1,000 devices, a one-hundred-fold increase. Metcalf would have it that the value of my network is now 100^2, or ten thousand (10,000) times the value of my old network.

But for the other network, they have gone from 1,000 to 1,010 - where is the increase in their value? Applying the same ?law?, the other network increased by one-hundredth (0.1) and so its value increased by 0.1^2 which is 0.01 or one-thousandth.

So the small network gets a huge increase in value, but the larger network gets virtually nothing. Where are the ?irresistible incentives??; Posted by: Fred Fredrickson Posted on: 03/14/05 You are currently: a Guest | Members login | Terms of Use

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Bad analysis? Fred Fredrickson | 03/14/05

Bad typing... Fred Fredrickson | 03/14/05

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