Impact of Network Effects



Impact of Network Effects

One of the most striking features of high-tech industries have emerged in recent years is the predominant role of the so-called "network externalities" or "network effects". In simple terms, a product emerges from the network externalities, if the value for each user increases with the number of customers who use it. The classic example is that of telephone. Indeed, the phone does not have much interest if only one person use it in a specific area. The more people for communication, the better it is.

The fact that some products become more interesting ...