Access and the Winner-Take-All Market

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Increasing Access creates a "Winner-Take-All" Market

This graph represents what happens to the connection probabilities when channel count is reduced to two. As access becomes universal, all agents desire to connect to the two highest ranking agents. This effect has been called a "Winner-Take-All" market ([Frank & Cook '95] see the paper for more details and references).

Suppose we gave agents more channels and also had a bigger population. The same distribution plotted for 25 agents with 5 channels each looks like the next graph:

The pattern is fairly similar. Increasing access benefits everyone until the capacity constraint binds. Then the top agents benefit most. The last row, representing universal access, is particularly interesting since the probability that any agent is in the top C choices is either 0 or 1. The information "middle class" initially benefit from increased access until the capacity constraint binds for them too.

If the top C agents can actually serve the entire market, as in the case of broadcast technology, then they are the ones who gather the most benefits, i.e. the winners take all. Kurt Vonnegut describes a story in which a local musician was once a neighborhood treasure but then telecommunications technoloy put him in competition with the world's best musicians. Then he loses his opportunity to perform. That is one of the phenomena we model here.

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