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In [[economics]], '''Beckstrom's law''' is a model or [[theorem]] formulated by [[Rod Beckstrom]]. It purports to answer "the decades old question of 'how valuable is a network'", and states in summary that "The value of a network equals the net value added to each user’s transactions conducted through that network, summed over all users."
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According to its creator, this law can be used to value any network be it [[social networks]], [[electronic networks]], [[support groups]] and even the [[Internet]] as a whole.<ref>[http://www.slideshare.net/RodBeckstrom/economics-of-networks-beckstrom-national-cybersecurity-center-department-of-homeland-security Economics of Networks]</ref> This new model values the network by looking from the edge of the network at all of the transactions conducted and the value added to each.
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It states that one way to contemplate the value the network adds to each transaction is to imagine the network being shut off and what the additional transactions costs or loss would be. It can thus be compared to the value of a [[pizza delivery]] service offered to its customers. If the pizza delivery service shut down, then the social value generated by its deliveries declines, and people will either go hungry or elsewhere.
 
Beckstrom's Law differs from [[Metcalfe's law]], [[Reed's law]] and other concepts that proposed that the value of a network was based purely on the size of the network, and in [[Metcalfe's law]], one other variable.  
 
== As an explicit economic model ==
 
The net present value ''V'' of any network ''j'' to any individual ''i'' is equal to the sum of the net present value of the benefit of all transactions less the net present value of the costs of all transactions on the network over any given period of time ''t'', as shown in the following equation. The value of the entire network is the summary of the value to all users, who are defined as all parties doing transactions on that network.
 
:<math> \sum_{i=1}^n  V_{i,j} = \sum_{i=1}^n \sum_{k=1}^m \frac{B_{i,j,k}-C_{i,j,k}}{(1+r_k)^{t_k}} </math>
 
where:
 
<math>\sum{V_{i,j}}</math> = value of a network ''j'' to all users
 
''V''<sub>''i'',''j''</sub> = net present value of all transactions to user ''i'' with respect  to network ''j'', over any time period
 
''i'' = identifies one user of the network
 
''j'' = identifies one network
 
''k'' = identifies one transaction
 
''B''<sub>''i'',''j'',''k''</sub> = the benefit value of transaction k to individual i with respect to network ''j''
 
''C''<sub>''i'',''j'',''k''</sub> = the cost of transaction ''k'' to individual ''i'' with respect to network ''j''
 
''r''<sub>''k''</sub> = the discount rate of interest to the time of transaction ''k''
 
''t''<sub>''k''</sub> = the elapsed time in years to transaction ''k''
 
''n'' = number of individuals
 
''m'' = number of transactions
 
==References==
{{reflist|2}}
 
==External links==
* [http://www.slideshare.net/RodBeckstrom/beckstroms-law-the-economics-of-networks-icann Beckstrom's Law & The Economics Of Networks – ICANN]
* [http://www.slideshare.net/RodBeckstrom/economics-of-networks-beckstrom-national-cybersecurity-center-department-of-homeland-security Economics of networks Rod Beckstrom National Cybersecurity Center Department of homeland security]
* [http://www.slideshare.net/RodBeckstrom/2008-black-hat-keynote-rod-beckstrom-director-ncsc-dhs 2008 Black Hat Keynote Rod Beckstrom director-NCSC-DHS]
* [http://gcn.com/articles/2008/08/08/beckstrom-on-cybersecurity.aspx Cybersecurity is hampered by a lack of understanding about the physics and economics of the networks we are trying to defend]
* [http://valuenetworks.com/public/blog/207585 Value Network Analysis]
* [http://www.forbes.com/2009/07/31/facebook-bill-gates-technology-security-defcon.html How To Value Your Networks]
* [http://www.thoughtfarmer.com/blog/2009/04/27/intranet-roi/ The New Laws of Intranet ROI]
* [http://blog.postmaster.gr/2009/04/08/beckstroms-law-fail/ Beckstrom's Law]
* [http://blogs.zdnet.com/Hinchcliffe/?p=961 Twenty-two power laws of the emerging social economy]
 
[[Category:Networks]]

Latest revision as of 19:18, 5 January 2015

In todays economy, customers have more possibilities than ever. Virtually every industry imaginable has tough opposition. People can choose to give their business to large businesses, smaller organizations, or any one of 1000s of other organizations they find on the internet. One method to stand from the competition is to boost the experience of doing business with your organization. Small retail stores in particular can find low-cost methods of providing clients with a more pleasurable and convenient shopping experience as a way to create a competitive advantage.

Any company that caters to women with kiddies knows that this part is in desperate need of convenience shopping. When women just take their young ones to retail stores, they"re broadly speaking rushed and spend less time in the stores. They sometimes would rather not look at all and drive off their shopping to later dates. The key reason for this is the fact that young children can often free tolerance, and wind up pressuring their parents to move on. In the long run, the merchants will be the people that actually miss out.

One low cost solution is always to purchase durable kids games. When kiddies have toys to play with in a store they typically do not rush their parents to leave that store. Oftentimes, women will go back to this store and tell friends about this child-friendly establishment. This leads to improved store traffic from this attractive market segment.

Having games could be great for various businesses. To compare additional information, we understand people check-out: staples fundable. Stores of all types certainly stand to benefit from having toys. Salons, health practitioners offices and banks also can attract clients by giving waiting space games for children to play with. To check up additional info, we recommend you gander at: discount fundable ledified. The investment in a few wooden activity toys and a sturdy kids play dining table could make a world of difference.

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