Expert Answers » Network Economics
Network Economics Glossary Definition (English)
Network externality Defined
The following is in context to Network Economics, because it's common for a single word to have multiple meanings you will find additional research links near the bottom of the page.
"A network exhibits network externalities when the value of a subscription to the network is higher when the network has more subscribers. In a traditional network, network externalities arise because a typical subscriber can reach more subscribers in a larger network. In a virtual network, network externalities arise because larger sales of component A induce larger availability of complementary components B1, ..., Bn, thereby increasing the value of component A. The increased value of component A results in further positive feedback. Despite the cycle of positive feedbacks, it is typically expected that the value of component A does not explode to infinity because the additional positive feedback is expected to decrease with increases in the size of the network"
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Additional Network externality Definition Starting Points
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Expert Dictionary: Network externality
Dictionary: Network externality
