network externalities


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network externalities

the increase in the value of a product as more people use it. For example, as the number of people with telephones increases, the value to any individual of owning a telephone is enhanced, since he or she has more people with whom to communicate.
References in periodicals archive ?
The effect on profits of an increase in the weight of network externalities is positive because the marginal cost decreases more rapidly than price, while output increases.
They provide a more complete introduction to network externalities theory than that provided here.
Network externalities / Network effects occur when an increase in the number of users of some good raises benefits for all users.
Higher take-up rate means more "internalization" of externalities/spill-overs under the argument that network externalities are exhausted if everybody is connected.
Interestingly enough, Beirut, and Lebanon as a whole, are not lacking in social and public challenges, but its startup ecosystem is way behind on social innovation when compared to other regions in the world, forfeiting a large area of growth with significant positive network externalities for the country.
It will also consider future growth by improving access to markets, stimulating trade, investment and boosting productivity and efficiency through associated network externalities and agglomeration effects.
In the sample studied, competitive pressures and network externalities were identified as having a strong positive effect on characteristics of environmental influences on social media adoption, confirming both what Frambach and Schillewaert posit in their Multi-level Model for Innovation Adoption (2002).
4) By contrast, consumers may be willing to pay an amount that is greater than their compensated reservation price if the good exhibits positive network externalities.
He details basic trends in the banking industry driven by technological or regulatory changes and the reasons for the existence of banks and their roles in the economy, then provides analysis of competition in the banking sector based on the tools of industrial organization, looking at pricing, product differentiation, frictions, network externalities and two-sided markets, market structure, mergers, and deregulation.
Each of a thriving service economy's major components -- ICT, finance, insurance, transportation and real estate -- needs the others to prosper, and cities are what bring them all together -- a phenomenon of network externalities.
De Nicolo, Favara and Ratnovski (2012) identify fire sales externalities, strategic complementarities, and network externalities as the externalities at the root of liquidity crises emphasised by the literature.
The corridor promotes growth by removing infrastructure bottlenecks, improving access to markets, stimulating trade and investment and boosting productivity and efficiency through associated network externalities and agglomeration effects.
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