Analyzing the economy of MLM plans

Its amazing how many MLM plans there are on the net.
There is also a lot of hype around those plans. Many plans are advertised as an option to have a great option to get rich quick on the internet. There are many experts for using these plans. But, what is the economic sense of these claims, if there is one?

I didn't find any decent economic analysis of this phenomena. So I started to write some myself.

If you find a serious economic analysis of MLM plans please drop me a note in the comments

Economics and Politics of Networks

If you follow my blog you can see that my latest interest became the fascinating world of network economics. There are a lot of exponential phenomena in this realm and it is really the new frontier of the Internet.
I found a book about this subject. It is called "The Wealth of Networks". Although it was written back in 2006 it seem really interesting. You can download the book from the net or buy it from Amazon.
When I will read it I will post here a review. If you read it yourself please share your thoughts in the comments section.

Khen

Economy, Cloud and Exponential phenomena

Cloud Computing is basically an economic phenomena and not a technical one. The heart of the cloud computing phenomena is scale.

This brings us to the subject of Economy of Scale. In an economy of scale a business gets advantage from its scale.

One of the best ways to have the required scale is to use exponential phenomena. Most of the network effects are exponential, so we can try and use network effects to get to big scale.

I already wrote about the Technological Network Effect. One can find an exponential phenomena also in MLM plans. The WWW itself is an exponential phenomena. By using links you get an exponential explosion of content. The best evidence is Google's enormous scale.

The phenomena of social networks is also an exponential one. The connections between the people in the social network increases exponentially.

Exponential phenomena are indeed a great force. We should learn how to analyze and predict those phenomena. There are some modern tools we can try to use when analyzing exponential phenomena, such as modern economy theory and chaos theory. But the application of these tools is not simple, since we are used to think in linear terms.

I want to try to apply those modern tools to exponential phenomena in future posts. If you have some ideas of how to apply interesting tools to interesting exponential phenomena please write about it in the comments section.