Network effect
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Network effect
see v1 | created by jjones | Add topic "Network effect"
- Title
- Network effect
- Description
- In economics, a network effect (also called network externality or demand-side economies of scale) is the phenomenon by which the value or utility a user derives from a good or service depends on the number of users of compatible products. Network effects are typically positive, resulting in a given user deriving more value from a product as other users join the same network. The adoption of a product by an additional user can be broken into two effects: an increase in the value to all other users ( "total effect") and also the enhancement of other non-users motivation for using the product ("marginal effect"). Network effects can be direct or indirect. Direct network effects arise when a given user's utility increases with the number of other users of the same product or technology, meaning that adoption of a product by different users is complementary.
- Link
- https://en.wikipedia.org/?curid=22053
resources
treated in Networks, Crowds, and Markets
authors
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