network effect (redirected from Law of Increasing Returns)

network effect

The resulting increased value of a product because more and more people use it. Telephones, fax machines and computer operating systems are examples. A product's success is due to compatibility and conformity issues, not that the product or technology may be superior or inferior to the competition. For more on the subject, read "Winners, Losers & Microsoft" by Stan J. Liebowitz and Stephen E. Margolis, published 1999 by The Independent Institute, Oakland, CA (ISBN 094599980-1). See tipping point and network externality.