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What is Technology-Related Network Effects

Chapter 132
Encyclopedia of Networked and Virtual Organizations
When the economic utility of a technology increases as the network of adopters of this technology and of complementary technologies grows in size, this is referred to as a technology-related network effect.
Published in Chapter:
Network Effects
Erik den Hartigh (Delft University of Technology, The Netherlands)
Copyright: © 2008 |Pages: 7
DOI: 10.4018/978-1-59904-885-7.ch132
Abstract
From the 1980s, network effects attracted a lot of interest in economics and management sciences. This was mainly due to the work of Arthur (e.g., 1988, 1989, 1990). While the subject of increasing returns to scale in companies had a long tradition in economics, network effects (i.e., increasing returns in markets) had hardly been addressed.
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