Network effects are particularly important with regards to software, especially operating systems. The more people who use Windows
, for example, the more valuable it is to have each copy of windows. When this phenomenum is combined with intellectual property
laws, monopolies have a real chance to exist.
Some argue this fact is a compelling reason for government scrutiny of the software industry and Microsoft in particular. I have seen economists concentrate much more on network effects since recent technological advances have made them more common. Indeed, most of the articles I have read in recent months which use the term use it in reference to the software or telecommunications industries.