Beckstrom's Law
From Rod Beckstrom - The Starfish and The Spider
The value of a network equals the net value added to each user’s transactions conducted through that network, valued from the perspective of each user, and summed for all.
This is a new fundamental law of economics. It answers the decades old question of "how valuable is a network." It is granular and transactions based and can be used to value any network. It applies to any network: social networks, electronic networks, support groups and even the Internet as a whole. To read a white paper explaining the law and mathematics in detail, please see The Economics of Networks. This new model or law values the network by looking from the edge of the network at all of the transactions conducted and the value added to each. 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.
Beckstrom's Law is an alternative or replacement for Metcalfe's Law, Reeds Law and other concepts that proposed that the value of a network based purely on the size of the network.
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