The Network Effect in Computer Programming Languages
One of the key concepts covered in this class is the direct benefit effect, also known as the network effect. This phenomenon is used to explain certain behaviors within populations that stem from positive externality, in which the welfare of an individual is affected by the actions of other individuals. Examples of this effect include social networking sites and telephones, in which the more people that use these services, the greater benefit it is to others.
An interesting application of the network effect can be seen in coding languages. A wide variety of programs exist to write software that performs many functions, and these programs include the likes of Python, Matlab, C++, Fortran, etc. The list of programs is not short, partly due to the fact that new languages tend to appear that replace or supplement existing languages. In his article “The Economics of Programming Languages”, David N. Welton discusses the importance of a code’s popularity to its success, and how new programming languages can be accessible and usable by following certain criteria. Welton explains that although a computer language can still be powerful even if it is not particularly popular, being a widely used language has its perks. With more people using a language, there is a higher chance that networking protocols will be written in that language, and thus writing a support code for that protocol will be easier. Hiring people to work with a specific language on a project is easier if that language is well known, since more people will know it. Thus, there is a network effect for using certain languages over others. Additionally, the switching cost of learning a new language (for those who have already learned a programming language) makes it more difficult for new languages to emerge, since learning a new language is not an easy task. As an example, some banks still use Cobol.
In order to overcome this network effect and gain entrance to the computer programming market, Welton lists criteria that the new languages should have. These include having more efficiency, higher quality, easier writing, and more productivity than existing languages. Finding a unique function (such as being highly specialized to model or calculate in scientific research as opposed to creating websites) also helps.
I thought this was an interesting topic because I was always curious about the wide array of computer languages available. Having only coded in one language (Matlab), it was interesting to me that so many existed. In fact, I thought the direct benefit effect would have meant that everyone code in the same language, so that the value of the principle language would rise and dominate over all others. However, Welton’s pointers on how to thrive in this market show how it is possible to overcome the network effect regarding computer languages.
Information Source:
Easley, David, and Jon Kleinberg. Networks, Crowds, and Markets: Reasoning about a Highly Connected World. New York: Cambridge UP, 2010. Print.
Article:
http://www.welton.it/articles/programming_language_economics.html