Network effects

Network effects,

Definition of Network effects:

  1. Effect that a single person using a good or a service has on the total perceived value of that product or service for others. The more who use the product or service, the higher its value becomes to the group - examples would include the telephone and social networks. The larger the group of people with access to a telephone, the more valuable the phone itself is to the people who use it; and the more people who join a social network, the more valuable the site is for the people who belong. Also called network externality.

Meaning of Network effects & Network effects Definition