Investigation of Safeguards Management for Operation Security of Nanoscale Nuclear Material in Nuclear Power Plants Using Game Theory - Atomic Nanoscale Technology in the Nuclear Industry - page 135

11.3 DynamicMethod
11.3.1 Network Effect

When.using.a.nonlinear.algorithm,.a.network.effect.is.introduced.where.one.
user's.actions.with.respect.to.the.good.or.service.can.affect.the.product's.value.
to.other.users..Network.effects.arise.when.a.user.wants.compatibility.with.other.
users.so.that.he.can.interact.or.trade.with.them;.this.creates.economies.of.scope.
among.different.users'.purchases.(Farrell.and.Kelmperer.2007)..The.value.of.
a.product.increases.as.more.people.use.it.due.to.the.network.effect..One.clas-
sic. example. is. the. telephone.. The. telephone. is. more. valuable. to. each. owner.
as.more.people.have.telephones..Since.a.user.may.purchase.a.phone.without.
intending.to.create.value.for.other.users,.this.creates.a.positive.externality..The.
most.important.issue.in.the.network.effect.is.how.users.connect.to.each.other..
The.Monte.Carlo.method.can.be.used.to.predict.a.mutual.event.scenario.like.
the.telephone.connection..Random.number.sampling.is.used.to.determine.the.
value.of.the.event.that.is.designed.and.used.in.this.chapter's.model.
Network.effect.can.be.viewed.using.game.theory..This.is.expressed.by.the.
matrix.form.in.Table 11.4..One.can.create.an.example.involving.safeguards..
There. are. two. cases,. A. and. B,. for. which. there. are. two. situations,. secure.
and.nonsecure..The.summations.or.subtractions.of.each.element.are.calcu-
lated..The.value.of.the.matrix.is.zero.for.a.zero-sum.game.(Samuel.2004)..In.
another.kind.of.game.theory,.a.cooperative.game.is.deined.for.a.group.play-
ers.(Bilbao.2000)..If.one.chooses.a.pair. N k

( ) .where. N .is.the.set.of.players..

,

The.characteristic.function.is.as.follows:

N
: 2 →

k H

.

This.also.meets. k ( ) =0 .
Historically,. network. effects. were. a. central. theme. in. the. arguments. of. T..
Vail,.the.irst.postpatent.president.of.Bell.Telephone,.in.gaining.a.monopoly.on.
U.S..telephone.services..In.1908,.there.were.many.local.and.regional.telephone.
exchanges,. most. of. which. were. eventually. merged. into. the. Bell. System.. In.
1917,.the.economics.of.network.effects.were.reported.by.N..Lytkins..Network.
effects. were. more. recently. popularized. by. R.. Metcalfe. ( Forbes . 2007),. who.
insisted.that.customers.needed.Ethernet.cards,.one.kind.of.network.adapter.
that.supports.the.Ethernet.standard.for.high-speed.network.connections.via.

TABLE 11.4
Matrix.of.Game.Theory

Classiication SecureA SecureB

Nonsecure.A Secure.A-Nonsecure.A Secure.B-Nonsecure.A

Nonsecure.B Secure.A-Nonsecure.B Secure.B-Nonsecure.B