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Sidestep and Twist by James Gardner

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CONSUMPTION THAT IMPROVES THE PROPOSITION

Economists describe any process where increasing consumption improves the over all value for two groups in terms of “network externalities”. Basically, the idea is there’s some kind of value generated by consumption that’s independent of any actual features of a product. This kind of thing is common knowledge to anyone who’s taken the time to study how recent internet phenomena (such as social networking) operate.

Most modern analysis, however, focuses attention on just one aspect of the network effect: the case where the product becomes more useful as more people adopt it. Telephones, fax machines, computer networks and Facebook all exhibit this kind of network effect.

But there are other network effects ...

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