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168 Marshall Van Alstyne and Nathaniel BulkleyThis work has been <strong>ge</strong>nerously supported by NSF Career Award #9876233and by Intel Corporation. Interested readers may test precise interpretations ofour theories in an online simulation environment of networked societies (theInformation Diffusion and Growth Simulator available at www.IndigoSim.org).NOTES1. Strategic uses of information are covered in the literature on game theory and industrial organization.On political uses of information within organizations, there is a separate literature(cf. Markus, 1983; Davenport et al., 1992).2. We emphasize that illustrations here are either bivariate correlations or anecdotes based oninterviews. Subsequent research will seek to introduce appropriate statistical controls.3. Participants were paid $25 and $100 for surveys and for permission to capture e-mail respectively.4. Blackwell demonstrates a formal equivalence between increased precision and reduced noise.5. Interestingly, precision also has a computational interpretation as the number of bits necessaryto distinguish different cases (Cover and Thomas, 1991).6. In-bound e-mail contacts are more important, which might indicate a stron<strong>ge</strong>r correlation withsocial networks than marketing per se (cf. hypotheses 11 and 12).REFERENCESAdams, J. D. (1990) “Fundamental Stocks of Knowled<strong>ge</strong> and Productivity Growth,”Journal of Political Economy 98 (4): 673–702.Aghion, P. and Howitt, P. (1998) Endo<strong>ge</strong>neous Growth Theory. Cambrid<strong>ge</strong>, MA: MITPress.Akerlof, G. A. (1970) “The Market for ‘Lemons’: Quality Uncertainty and the MarketMechanism,” Quarterly Journal of Economics 84 (3): 488–500.Arrow, K. J. (1962a) “The Economic Implications of Learning by Doing,” The Reviewof Economic Studies 29 (3): 155–73.—— (1962b) “Economic Welfare and the Allocation of Resources for Invention,” inRichard R. Nelson (ed.), The Rate and Direction of Inventive Activity: Economicand Social Factors, pp. 609–25. National Bureau of Economic Research,Conference Series. Princeton, NJ: Princeton University Press.—— (1974) The Limits of Organization. New York, W. W. Norton.Arthur, B. W. (1989) “Competing Technologies, Increasing Returns and Lock-in byHistorical Events,” The Economic Journal 99 (394): 116–31.Bain, J. (1956) Barriers to New Competition. Cambrid<strong>ge</strong>, MA: Harvard UniversityPress.Baker, W. E. (1984) “The Social Structure of a National Securities Market,” AmericanJournal of Sociology 89 (4): 775–811.Balakrishnan, A., Kalakota, R. et al. (1995) “Document-centered Information Systemsto Support Reactive Problem-solving in Manufacturing,” International Journal ofProduction Economics 38: 31–58.Baldwin, C. Y. and Clark, K. B. (2000) Design Rules: The Power of Modularity.Cambrid<strong>ge</strong>, MA: MIT Press.

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