Abstract
Network effect is defined as the value that an additional user of a product has on that product’s value to others. In an industry exhibiting network effect, firms need to consider the possible role of the network being the establishment of a competitive edge. In this review, our goal is to synthesize the broad literature on network effects, and we put forward the argument that, in practice, network effect has quietly become a key factor in forming a firm’s competing strategy. In the presence of positive network effects, consumers’ willingness to pay is an increasing function of the network size.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
More From: Journal of Strategic Innovation and Sustainability
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.