Network+Effect

The network effect is increasingly more common in this day and age. The network effect happens when the utility of a product goes up as more people purchase the product. This can be somewhat counter intuitive in that, even after a product is purchased, the personal satisfaction that you gain from it can go up if other people also puchase the product. An example of this are computers, telephones, and even the Common Application. One person owning a phone is worthless because there is no one else to call, but millions of people owning cell phones means that the phones are connected on the same network and now having a cell phone has much more utility than it would with just one user. A network effect happens whenever utility of a product is determined by how many other owners there are of that product. Few owners make the product less useful but the more owners there are the greater the utility each owner will gain from the product. Another example is the Common Application, if just one college or just one person used the application, there would be no value in it, but the more universities that use it the more beneficial it is to the consumer, in this case seniors.
 * Description**

This is a picture of a very popular video game, World Warcraft. In this game players play the game online, and so therefore in accordance with the Network Effect each player benefits when other players join online. For exampe, if there was only 2 players on WoW then it would not be nearly as fun to play than if there is 2 million players.
 * Picture**:

[|**NFL Draft**] This is a video of the NFL Draft with greatly benefits because so many college athletes participate, so the variety of athletes gives NFL teams a lot of choices as opposed to if there were not very many players entering the draft.
 * Video:**

[|Network Effect on Wikipedia] [|In Depth Definition]** [|**University of Texas Network Effect Essay**]
 * Links:

Which of the following is an example of network effects? A) Cheeseburgers B) Cereal companies C) Text books D) Standardized testing E) Marathon runners [|Answer]
 * Question:**