Coordination

When deciding what candy bar to consume, you don’t much care about the type of sweets other people buy. For many decisions in life, however, it’s vital for you to coordinate your actions with others. When purchasing products with network externalities, you should buy the good that most other people plan to get. Companies need to take consumers’ reactions to network externalities into account by convincing consumers not just that their product is good, but also that it will be popular.