Network externalities lead to positive feedback, so that products tend to rapidly coalesce to an industry standard.

Question

Quizplus · Accepted Answer

Network externalities occur when the value of a product or service increases as the number of users or participants increases. This creates a positive feedback loop wherein more users lead to an increase in value, which attracts even more users, and so on. As a result, products with network externalities tend to rapidly coalesce to an industry standard as users flock to the product or service that has the most widespread adoption.

Network Externalities Lead to Positive Feedback, So That Products Tend