How Big Tech Firms have redefined the paradigms of economics!
Not a day passes by without using at least one product or application of the Big Tech companies. These companies have redefined the long established principles of economics. 1. Networking Effects: Networking effects is the phenomenon where the value of a product increases due to the addition of every new customer/user. The effect of networking in tech industry implies that the company/product which is the 'early mover' has an advantage and the value of the network grows with every additional user. In 'network industries' the equilibrium tends towards a few products and their companies. Consider Microsoft, the predominant operating system of the world. Consumers want to stick to (Microsoft) technologies that are dominant and compatible with all the other users, software and hardware products. Once consumers get used to these applications or products they do not wish to change easily. Similarly, with Facebook, any new user benefits due to the gigantic network of users a