Without accounting for the indirect
network externality, an individual compares point A to C, showing a decrease; the society should compare A to E, showing an increase.
Perhaps such an explanation did not fit the two-sided
network externality mold or violated the admonition against applying lessons from other sectors to the card business.
network externality exists when one individual's consumption of a
The more parties use a standardized term over time, the more certainty the term achieves--giving rise to a
network externality effect.
The existing domestic
network externality effect is likely to be supplemented by a neighbourhood
network externality effect as official euroisation spreads eastward.
Namely, in Figure 5, the social marginal cost curve lies above the private marginal cost curve because of the congestion externality and the social marginal benefit curve lies above the private marginal benefit curve because of the
network externality. The socially optimal level of airport traffic, [Q.sup.*], occurs at the intersection of the social marginal benefit curve and the social marginal cost curve.
Round 1 requires all students to make a simultaneous brand choice, giving them experience with the
network externality's effect on utility.
Robert King [1983, 133] identifies a direct
network externality in the market for banknotes when he observes that "an increase in the number of users of a particular note could lower the probability of meeting an individual uninformed about the value of one's note and, hence, the expected cost of trades." John P.
Specifically, the goal of this paper is to show that the actual rate of entrepreneurship creates a
network externality that, by favoring the concentration of a significant quantity of economic activity and by encouraging alertness, also promotes growth.
The market for VCRs exhibits a similar
network externality. The demand for Beta relative to VHS machines is a function of the number of video titles available in each format, and the number of video titles produced for each format depends on the number of each type of machine sold.
This "
network externality" is particularly important for operating systems and Internet browser formats, since software developers and Web site designers have to pick a standard for which to optimize their products.