Microsoft Excel dominates the
market for spreadsheets. Many economists believe that its
dominance is due to network externalities. Which of the
following captures the network-externality
Although it is an expensive
spreadsheet, it dominates because it is by far the
Build a better mousetrap and the world
beats a path to your door. Excel is the better
Excel has become the standard
in business, and hence it is convenient to use it
because that is what everyone else is using.
Excel sells because it priced
below other spreadsheet programs, and Microsoft can
sell it at a low price because it sells so many
If you are developing a product that has
network externalities and those externalities lead to
network economies, it is probably very important
get big first.
have a product that enhances status.
have a product that is nonexcludable.