Motivation for Writing This Book

The motivation for writing this book grew from several years of research on the economics of network industries as well as from extensive teaching of undergraduate and graduate industrial organization courses at Haifa University, Swedish School of Economics (Hanken), Tel Aviv University, Stockholm School of Economics, the University of Michigan, and the State University of New York. I felt that the economics of networks is an important field in economics as it applies to a wide variety of industries that influence our life and will even become more influential in this millennium. In addition, it provides some link between consumer behavior and social interaction.

I chose to target this theoretical book for advanced undergraduate and beginning graduate students. I was guided by my belief that there should not be any necessary correlation between mathematical complexity and theoretical precision. That is, the purpose of this book is to bring to the advanced student the basic and the latest developments in this field in a very precise manner, but without resorting to advanced mathematical techniques.

The Level and Prerequisites

My intention is to make this book readable to undergraduates who have some training in intermediate-level microeconomics, although in some cases, such as in engineering school, even this training may not be needed. This course can be taught without using calculus. Occasionally, the student will have to have a very basic knowledge of what probability is and how to calculate the joint probability of two events in discrete spaces.