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Updated: Aug 20, 2021

1. A group of consumers for whom the utility derived from the consumption of certain goods or services increases as additional consumers purchase the same goods and services. Networks emerge if these particular goods or services have little or no value in isolation, but generate more value when more consumers use the same goods and services. A market characterized by such properties is called a network market in which there exist positive consumption externalities termed network externalities. A typical example of a network market is telecommunications. 2. A model of the interconnections within a set of consumers or firms. A network is described by a set of links that determine which consumers or firms are connected. As examples, connections can describe which consumers know each other, or which consumers are customers of a firm. Networks can be used to describe any economic or social situation in which there is a structure to the interaction of individuals. See also private network; public network.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.