Network effects, installed base, and natural monopoly
When a technology's value to each user grows with how many other users have already adopted it, price stops being the only lever that matters — being first, and being bigger, becomes an advantage of its own, and the market can tip decisively toward one winner even when both platforms are otherwise identical. Students feel that dynamic directly, and confront the harder question it raises: once neither side has a clear lead, is staying in the fight worth it, or does refusing to back down just guarantee both platforms lose?
The simulation supports several angles of that tension:
- Installed base vs. price. Every round, adoption is driven by both a platform's fee and how many professionals already use it — configurable sensitivities let the balance between the two be dialed up or down.
- Exit is permanent. A firm can walk away from a market at any point, but never come back — and the fixed cost of staying active each round can be configured, isolating how much of the standoff is really about how expensive it is to keep fighting an unwinnable fight.
- A real negotiated exit. Starting from a configurable round, a live, out-loud negotiation between the two firms in a market can be run in class, then whatever they agree to — one exits, the other pays — gets recorded directly into the simulation.
The Network Pull
Each team runs a professional networking platform, competing for the same pool of professionals deciding, every round, whether to adopt one platform, a rival's, or neither. The more professionals already on a platform, the more attractive it becomes to the next one — so early leads compound, and a firm can find itself fighting a network it can no longer catch.
Firms pay a fixed cost every round they stay active, can exit for good at any time, and — when enabled — get one shot at a real negotiated exit partway through, decided out loud in class and then entered directly into the results.
