Increases in the value of a product to each user, including existing users, as the total number of users rises are called

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Network effects refer to the value created by a product or service when more people use it, which in turn attracts more users, creating a virtuous cycle of growth. As the number of users increases, the value of the product to each user also increases, making it more attractive to new users, and reinforcing the cycle of growth. Examples of products with strong network effects include social networks, ride-hailing apps, and marketplaces.

Increases in the Value of a Product to Each User