IV Case (30 points in total)Aberdeen box has recently been plagued by a thorny problem, Aberdeen boxs team had developed a very comprehensive and useful travel APP, this APP can refer to the flight information, also can buy tickets and book the discount tickets. But the problem is that the users used it , but quickly change to his competitors if they have new functions and higher discount.After class, he asked the professor for the question.Box Professor: "your team faced a very common phenomenon in internet, which is a typical network effect. The value of a product to a user depends on the number of other users who use the product. Simple to say that the user more valuable; the more valuable, more users; accumulation of viscosity, when the number of users reached a certain critical point, there may be the winner of the phenomenon. For example, WeChat, the more people use, the user is more valuable when in WeChat's friends to reach a certain amount, the formation of a complex network of relationships, even if one day you want to switch to another new software, but you find a lot of friends in WeChat. You have to return to WeChat. This is a typical case of "come for tools, keep for the Internet."."Box professor continues to say: "this APP take you just for your APP provides many tools for users of things, this is just a tool, the user can choose other instruments at any time, to increase user stickiness. If you want to let users stay in your APP, you will want to add some" network effects ". For example, through this tool APP you can find out your friends in the same airport, or to find out your friends will come to a similar place at the same time, maybe the users can find out some strangers who want to talk on the airplane. And these can set up a network in the APP, this network can help the APP to reserve the users. If you finished this, even your competitors launched some new functions, your users will not leave you in a moment, you will have time to iterate your APP, shorten or even exceed your opponent. Box boy: very useful."Box Professor: "network effect has two major characteristics: first, network effects will lead to a special effect, which means the winner take all. The more users the more valuable, more valuable, users will continue to expand, once the breakthrough in a certain critical point, and will eat a huge part of the market share; second, because the effect of the winner of the Internet, so there is the first to seize the market, who can lead to the accumulation of a large number of users, who have the critical point the opportunity to achieve the winner, after the opponent is very strong even if it is difficult to surpass".Aberdeen box: "I have to go back and think about this problem, add some social elements in APP, using the network effect, enhance user stickiness to retain users, for one day you can reach the critical point of all. Thank you, professor."Questions:What is the network externalities? (5 points)If the APP want to be the number one of the market, what can they do ?(10 points)What is the benefits of a company to be a Winner-take-all?(5 points)Are winner-take-all markets good for consumers? Why?(10 points)