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network effect

   Also found in: Wikipedia 0.01 sec.
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.


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But he explains that the premise does have a proven track record in markets characterized by increasing returns and network effects.
de Montreal) explores the possibility that Western history has been significantly revised by the Information Age in this book, which charges that technology has influenced both scale economies and network effects.
In their example, indirect network effects can lead to a strong, economically significant increase in market concentration.
 
 
 
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