Which of the following pieces of advice would you give to a firm that wants to exploit network effects?
A) Charge a heavy license fee for new technology.
B) Refrain from using technical standards.
C) Create incentives for other firms to develop complementary products.
D) Do not use aggressive marketing strategies for killer applications.
E) Increase switching costs.

Question

Quizplus · Accepted Answer

Creating incentives for other firms to develop complementary products can help to increase network effects, as more firms developing products that work well together can make the original product more valuable. Charging a heavy license fee or increasing switching costs can actually deter potential users from joining the network, while refraining from using technical standards or not using aggressive marketing strategies may not have a significant impact on network effects.

Which of the Following Pieces of Advice Would You Give