Snob effect - network externalities, Microeconomics

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The Snob Effect

- If network is negative externality, a snob effect exists.

* The snob effect refers to desire to own unique or exclusive goods.

* The quantity demanded of snob good is higher the fewer the people who are having it.

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Network Externalities and Demands for Computers and Fax Machines

* Examples of Positive Feedback Externalities

- Mainframe computers: 1954 - 1965

- Microsoft Windows PC OS

- Fax-machines and electronic mail

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