The natural state of a market where network effects are present is for there to be intense competition between several rivals that come to an equalibrium where their respective market shares are roughly identical.

Question

Quizplus · Accepted Answer

In markets where network effects are present, the natural state tends towards a monopoly or oligopoly because the value of a product or service increases as more people use it, leading to a "winner-takes-most" scenario where one or few firms dominate the market.

The Natural State of a Market Where Network Effects Are