Network Effects Are Characterized by a Positive-Feedback Loop, Where the Biggest

Multiple Choice

Network effects are characterized by a positive-feedback loop, where the biggest networks continue to grow bigger. What implication does this positive-feedback loop have on network markets?

A) Formation of alliances to counter the growing influence of dominant firms
B) Early, fierce competition between rivals
C) Loss of revenue for market leaders due to arrival of new entrants
D) Emergence of several firms that constantly swap market dominance
E) Shrinking of market size due to the ambivalent nature of competition