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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 ch

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)?
- zhte415 8y ago
  Are you in the second year of a degree in economics? What you write is textbook. What's your planned thesis?

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)?
zhte415 8y ago
Are you in the second year of a degree in economics? What you write is textbook. What's your planned thesis?