Katz and Shapiro famously analyzed how network externalities influenced the adoption of technology: they lead to the classic S-shaped adoption curve in which slow early adoption gives way to rapid deployment once the number of 6 Ross Anderson and Tyler Moore users reaches some critical mass . Network effects can also influence the initial deployment of security technology, whose benefit may depend on the number of users who adopt it. The cost may exceed the benefit until a minimum number adopt; so everyone might wait for others to go first, and the technology never gets deployed.
Made me think of Capcom and the PS3. Why work on developing their own engine and spending tons of money to make Monster Hunter 3 - when it would be a hell of a lot cheaper to go to the Wii, use their existing engine (with modifications), and call it done. Until the PS3 hits some sort of critical mass, publishers aren't going to want to put in huge efforts - they'll let other publishing houses (such as Square-Enix and Konami) do the heavy lifting for them.
At the same time, it also explains why the Wii has 86 games this holiday season compared to 40-something on the other two consoles: early adoption was very high, which lead to developers going "Crap - we better jump on that!"
The rest of the article deals with the economics of security systems and incentives, but this one part jumped out in my mind about "Why did Capcom stop making Monster Hunter 3 for the PS3?"