Sure, Network Effects Are Valuable, but Why? List the Three

question 33

Essay

Sure, network effects are valuable, but why? List the three sources of the value (cited in our textbook & in class) that fuel the competitive advantage of network effects.

Learn about the effects of upward and downward social comparisons on emotions and motivation.

Understand the concepts of misery and affiliation, including Schachter's findings on social behavior under stress or fear.

Grasp the significance of homophily in group dynamics and how similarity influences group membership.

Appreciate the role of self-evaluation maintenance theory in social relationships and group affiliations.

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Definitions:

Factors of Production

Resources used in the production of goods and services, including labor, capital, land, and entrepreneurship.

Human Capital

The skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value to an organization or society.

Production Possibilities

The various combinations of goods and services that can be produced within an economy given available resources and technology.

Circular-Flow Diagram

A visual model of the economy that illustrates the exchanges between households and firms through markets for products and resources.