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> Plenty of other communications networks are open, so any network effect of "walled gardens" ought to be attributed to the superiority of the product. So, whe

> Plenty of other communications networks are open, so any network effect of "walled gardens" ought to be attributed to the superiority of the product. So, when people evidently complain that they feel the social pressure to use the walled garden even though they rather wouldn't ... then that ought to be attributed to the superiority of the product? Could you explain your reasoning behind that?

qeternity 8y ago
What explanation is necessary? You've laid it out already. It's like saying you feel pressure to drive a gasoline powered car instead of a coal powered one because gasoline is much more convenient. The network effect arises out of superiority over competition. The social pressure is a result of everyone using the same platform, which itself is a testament to the product.
- vageli 8y ago
  In what way does ubiquity equate to superiority? Popularity does not confer superiority.
  - qeternity 8y ago
    Haha of course it does, though perhaps not to you. If there were a superior alternative, people would use it. You're just defining this problem so narrowly has only the app itself or something. It's the network, the integrations, the history, etc.
    - contras1970 8y ago
      McDonald's has the best food, right?
      - qeternity 8y ago
        Define best. Best tasting, no. Heathliest, no. Some combination of taste, nutrients, affordability and convenience? Yes.
    - vageli 8y ago
      The most abundant organism on this planet is not humans [0], but I daresay humans are superior to single-celled organisms (or a virus as is the case in the linked article). [0]: https://www.smithsonianmag.com/smart-news/guess-what-the-most-abundant-organism-on-earth-is-19254662/ https://www.smithsonianmag.com/smart-news/guess-what-the-mos...
- zAy0LfpBZLC8mAC 8y ago
  So, you are essentially saying that network effects don't exist, then, right? The idea of network effects is that they create a cost simply for individually choosing an uncommon option, after all other costs and benefits have been accounted for. Which would obviously imply that they create an incentive to choose a common option even if it were an inferior choice without the network effect, as long as the benefits of the uncommon option don't exceed the cost caused by the network effect. Which would thus imply that a situation could arise where everyone individually chooses an inferior product. So, if you say that that can't happen, then network effects don't exist, right?
  - qeternity 8y ago
    It may seem pedantic to you, but network effect creates a benefit, not a cost. That may create an opportunity cost for those not in the network, but it's not a direct cost. This distinction is actually very important. Also, how did I imply network effect doesn't exist? Where did I say anything that you're implying I said? You're trying to strip out the network effect from this theoretical product and I'm saying you can't. Something can be superior simply bc of its network. Take the most obvious example, the internet. Where is your outrage? TCP/IP sucks. BGP sucks. But we embrace these things nonetheless because of the (literal) network. This extends from computers to anthropology to biology. You're trying to make an apples to apples comparison assuming no network effect and I'm saying that's pointless.
    - zAy0LfpBZLC8mAC 8y ago
      > It may seem pedantic to you, but network effect creates a benefit, not a cost. That may create an opportunity cost for those not in the network, but it's not a direct cost. This distinction is actually very important. So, it's a cost, but not a cost? What's your point? Also, the network effect doesn't create a benefit. The benefit of using a network (and thus the cost of not using the network) is simply what we call the network effect. Other than that I have no clue what point you are actually trying to make, and it all smells like a whole lot of equivocation and missing the point. Do you agree that it is possible to have a situation where one product dominates the market because individuals making rational decisions prefer that dominating product because of its dominance, even though a different product would be beneficial for every consumer of the currently dominating product if they magically agreed on switching over, even when considering the switching costs (other than the costs of reaching agreement, which is assumed to be zero for this hypothetical case)?
- realusername 8y ago
  Cars don't have much network effects, the best car is bought regardless of the dominant brand of the year (I agree with your point on the car). However, social network have a network effect which makes it very hard to switch, if all your friends use app A, it's difficult to make them use app B.

qeternity 8y ago

What explanation is necessary? You've laid it out already. It's like saying you feel pressure to drive a gasoline powered car instead of a coal powered one because gasoline is much more convenient. The network effect arises out of superiority over competition. The social pressure is a result of everyone using the same platform, which itself is a testament to the product.

vageli 8y ago
In what way does ubiquity equate to superiority? Popularity does not confer superiority.
- qeternity 8y ago
  Haha of course it does, though perhaps not to you. If there were a superior alternative, people would use it. You're just defining this problem so narrowly has only the app itself or something. It's the network, the integrations, the history, etc.
  - contras1970 8y ago
    McDonald's has the best food, right?
    - qeternity 8y ago
      Define best. Best tasting, no. Heathliest, no. Some combination of taste, nutrients, affordability and convenience? Yes.
  - vageli 8y ago
    The most abundant organism on this planet is not humans [0], but I daresay humans are superior to single-celled organisms (or a virus as is the case in the linked article). [0]: https://www.smithsonianmag.com/smart-news/guess-what-the-most-abundant-organism-on-earth-is-19254662/ https://www.smithsonianmag.com/smart-news/guess-what-the-mos...
zAy0LfpBZLC8mAC 8y ago
So, you are essentially saying that network effects don't exist, then, right? The idea of network effects is that they create a cost simply for individually choosing an uncommon option, after all other costs and benefits have been accounted for. Which would obviously imply that they create an incentive to choose a common option even if it were an inferior choice without the network effect, as long as the benefits of the uncommon option don't exceed the cost caused by the network effect. Which would thus imply that a situation could arise where everyone individually chooses an inferior product. So, if you say that that can't happen, then network effects don't exist, right?
- qeternity 8y ago
  It may seem pedantic to you, but network effect creates a benefit, not a cost. That may create an opportunity cost for those not in the network, but it's not a direct cost. This distinction is actually very important. Also, how did I imply network effect doesn't exist? Where did I say anything that you're implying I said? You're trying to strip out the network effect from this theoretical product and I'm saying you can't. Something can be superior simply bc of its network. Take the most obvious example, the internet. Where is your outrage? TCP/IP sucks. BGP sucks. But we embrace these things nonetheless because of the (literal) network. This extends from computers to anthropology to biology. You're trying to make an apples to apples comparison assuming no network effect and I'm saying that's pointless.
  - zAy0LfpBZLC8mAC 8y ago
    > It may seem pedantic to you, but network effect creates a benefit, not a cost. That may create an opportunity cost for those not in the network, but it's not a direct cost. This distinction is actually very important. So, it's a cost, but not a cost? What's your point? Also, the network effect doesn't create a benefit. The benefit of using a network (and thus the cost of not using the network) is simply what we call the network effect. Other than that I have no clue what point you are actually trying to make, and it all smells like a whole lot of equivocation and missing the point. Do you agree that it is possible to have a situation where one product dominates the market because individuals making rational decisions prefer that dominating product because of its dominance, even though a different product would be beneficial for every consumer of the currently dominating product if they magically agreed on switching over, even when considering the switching costs (other than the costs of reaching agreement, which is assumed to be zero for this hypothetical case)?
realusername 8y ago
Cars don't have much network effects, the best car is bought regardless of the dominant brand of the year (I agree with your point on the car). However, social network have a network effect which makes it very hard to switch, if all your friends use app A, it's difficult to make them use app B.