nätverkseffekt

Nätverkseffekt, also known as network externality, is a phenomenon where the value or utility a user derives from a good or service depends on the number of other users of the same or compatible good or service. In simpler terms, the more people use something, the more valuable it becomes for everyone using it.

This effect is particularly prevalent in industries involving communication technologies and platforms. For instance, a telephone is of little use if only one person owns one, but its value increases exponentially with each additional person who acquires a telephone, enabling more connections. Social media platforms like Facebook or Twitter are classic examples; their appeal and utility are directly tied to the size of their user base, as more users mean more content, more interactions, and a greater sense of community.

There are two main types of network effects: direct and indirect. Direct network effects occur when the value of a product or service increases directly with the number of users on the same side of the market. Indirect network effects, also known as two-sided network effects, arise when the value of a product or service for one group of users depends on the number of users in a different but complementary group. For example, a video game console becomes more valuable to gamers if there are many game developers producing titles for it, and vice versa.

Network effects can create powerful positive feedback loops, leading to dominant market positions for early adopters or successful platforms. This can result in winner-take-all or winner-take-most markets, where one or a few platforms capture the vast majority of users. Understanding network effects is crucial for businesses operating in platform-based industries and for policymakers considering competition and regulation.