What is network externality? How are those externalities get sloved?

Network externality
refers to the economic concept of the externalities entailed in network effects. In particular, where there are network effects, a user only takes into account his own utility in his decision as to whether or not to join the network; the increased utility his joining confers on all other users is ignored in his decision. Overlooking these positive externalities would lead to the usual problem of under-consumption.

In turn, it gives rise to the problem of how to solve (internalise) these externalities. Firms can do this by subsidising early adopters, who would otherwise not join if they had to face the full marginal cost of their joining.