#business #economic Created at 2022-12-20 # [Anonymous feedback](https://www.admonymous.co/louis030195) # [[Epistemic status]] #shower-thought #to-digest # Related # TODO > [!TODO] TODO # Network Economies Network economies refer to the economic benefits that businesses can gain from increased network usage. Network economies arise when more users join a network, leading to increased efficiency, improved quality, and cost savings for all users. This can be seen in industries such as telecommunications, where increased usage can lead to lower costs for all participants. Network economies also extend to online platforms, where businesses can benefit from increased user engagement and the ability to reach more customers. ## Metcalfe's law Metcalfe's law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n2). First formulated in this form by George Gilder in 1993, and attributed to Robert Metcalfe in regard to Ethernet, Metcalfe's law was originally presented, c. 1980, not in terms of users, but rather of "compatible communicating devices" (e.g., fax machines, telephones). Only later with the globalization of the Internet did this law carry over to users and networks as its original intent was to describe Ethernet connections.