Editing Network effect (section)

=== Multiple equilibria and expectations ===
Networks effects often result in multiple potential market equilibrium outcomes. The key determinant in which equilibrium will manifest are the expectations of the market participants, which are self-fulfilling.<ref name=":2" /> Because users are incentivised to coordinate their adoption, user will tend to adopt the product that they expect to draw the largest number of users. These expectations may be shaped by path dependence, such as a perceived [[first-mover advantage]], which can result in [[Vendor lock-in|lock-in]]. The most commonly cited example of path dependence is the [[QWERTY]] keyboard, which owes its ubiquity to its establishment of an early lead in the keyboard layout industry and high switching costs, rather than any inherent advantage over competitors. Other key influences of adoption expectations can be reputational (e.g. a firm that has previously produced high quality products may be favoured over a new firm).<ref>{{cite book |title=Contemporary Strategy Analysis  |first=Robert M. |last=Grant |year=2009 |publisher=John Wiley & Sons |isbn=978-0-470-74710-0}}</ref>

Markets with network effects may result in inefficient equilibrium outcomes. With simultaneous adoption, users may fail to coordinate towards a single agreed-upon product, resulting in splintering among different networks, or may coordinate to lock-in to a different product than the one that is best for them.<ref name=":2" />