Abstract
Prior research on whether network effects outweigh product advantage in determining the market success of new products is mainly theoretical with little empirical evidence. This paper dissects the network effects phenomenon, and discovers that different network effect dimensions exert conflicting moderating influences on product performance. Examining survey data on 272 new product launches, the results indicate that product advantage matters regardless of network effects. Further, while some components of network effects can be leveraged to help customers overcome their uncertainties towards new product adoption, some create additional anxieties that harm product performance. Implications for marketing practitioners as well as academia are discussed.
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