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What is Network effect

Handbook of Research on Practices and Outcomes in E-Learning: Issues and Trends
The effect that one user of a product or service has on the value of that resource to the other users.
Published in Chapter:
Could Web 2.0 Technologies Support Knowledge Management in Organizations?
Luiz Fernando de Barros Campos (Federal University of Minas Gerais, Brazil)
DOI: 10.4018/978-1-60566-788-1.ch012
Abstract
This chapter investigates whether information technology tools typical of Web 2.0 can support Knowledge Management (KM) practices in organizations. An investigation on the Web is conducted and the appropriate literature examined. The information technology tools employed in organizations nowadays are discussed with the help of three guidelines which each present two opposing ideas: knowledge creation versus knowledge sharing, tacit knowledge versus explicit knowledge and hierarchical KM versus organic KM. It is argued that these tools reveal an innate contradiction: they are based on a centralized conception and production but aim to deal with informal, fluid processes, which resist structuring. The term Enterprise 2.0 is defined and examined, since it brings out a critical view of traditional KM technology. In this context, the prevailing technologies on the Web are described as well as the associated use practices. The technologies and practices highlighted are those that enhance the collective creation of information and knowledge-intensive products and the active, rich user participation which influences the development of own technologies. Subsequently, many Web 2.0 tools and services that are, or could be, used in KM practices are described and the sites that provide them are indicated. It is noted that these new technologies are inducing cooperative and decentralized work processes that lead to emerging products of high quality and complexity. Furthermore, they are characterized by net effects, simplicity, ease of use, low cost and rastreability. Nevertheless, there are some difficulties in the application of Web 2.0 technologies, among them, the attainment of performance requisites, privacy and security, the possible emergence of counterproductive results and the need to motivate people to create content. The challenges and opportunities in the organizational use of Web 2.0 technologies are remarked. Finally, the managerial interventions appropriate to enable the success of KM projects based on Web 2.0 technologies are discussed.
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More Results
RFID and Supply Chain Visibility
A network effect is a characteristic that causes a good or service to have a value to a potential customer which depends on the number of other customers who own the good or are users of the service. In other words, the number of prior adopters is a term in the value available to the next adopter.
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Enhancing E-Commerce through Sticky Virtual Communities
Network effect refers to the phenomenon whereby a service becomes more valuable as more people use it, and this in turn encourages new users to become adopters of the service.
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Evaluation of a Migration to Open Source Software
In economics, denotes a demand-side effect, by which the utility given to a certain good increases with the number of successive users adopting it. Information goods are a typical example of good that manifest this behaviour.
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The Microeconomic Impacts of E-Business on the Economy
The effect whereby an economic agent’s valuation of a product (e.g., a trading platform) increases with the number of consumers of the product (e.g., the number of other traders on the platform).
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Network Effects of Knowledge Diffusion in Network Economy
A phenomenon whereby a service becomes more valuable as more people use it, thereby encouraging ever-increasing numbers of adopters.
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