BMGT 301 Lecture Notes - Lecture 13: Nyce, Indirect Costs, Data Loss

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Occur when the value of a product or service increases as its number of users grows. Also known as network externalities or metcalfe"s law. When present, network effects are among the reasons you will pick one product or service over another. When value starts to level out, innovation occurs. Comes from three sources: exchange, staying power, complementary benefits. Every product or service subject to network effects fosters some kind of exchange. Anything you can represent in the ones and zeros of a data stream. Any product that can be digitized can be a product of exchange. Networks with greater numbers of users suggest a stronger staying power = is defined as. The long term viability of a product or service. The cost a consumer incurs when moving from one product to another. Can strengthen the value of network effects as a strategic asset.

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