This Turkish Airways ad shows the value of network externalities to a market. A network effect occurs when the value of a product or service depends on the number of users. Network effects are typically positive, such that the more people using the product, the more valuable the product becomes. Airlines are an example of network effects, as the ad points out, because the more places they fly, the more valuable the flights are to the people purchasing the tickets.
Ted: Jonas Eliasson: How to solve traffic jams
Traffic jams are often provided as an example of a market failure. Drivers are focused on their own driving and don’t consider how it may impact others. As a result, too many people use road systems and congestion occurs. This Ted Talk highlights how Pigouvian taxes could be used to correct the market failure by instituting congestion taxes. While it’s not presented by an economist, he uses a lot of economics concepts throughout the talk.
Birds on a Wire — Externalities
This clips was shared by CharityJoy Acciardo. It’s a nice clip to show before class starts or in the beginning of class on common resources, network externalities and congestion externalities.