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The Dvd-vs.-Divx Standard War: Empirical Evidence of Network Effects and Preannouncement Effects

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Author Info
David Dranove
Neil Gandal
Abstract

We test empirically for network effects and preannouncement effects in the DVD market. We do this by measuring the effect of potential (incompatible) competition on a network undergoing growth. We find that there are network effects. The data are generally consistent with the hypothesis that the preannouncement of DIVX temporarily slowed down the adoption of DVD technology. Copyright (c) 2003 Massachusetts Institute of Technology.

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Article provided by Blackwell Publishing in its journal Journal of Economics & Management Strategy.

Volume (Year): 12 (2003)
Issue (Month): 3 (09)
Pages: 363-386
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Handle: RePEc:bla:jemstr:v:12:y:2003:i:3:p:363-386

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  1. Nicholas Economides & V. Brian Viard, 2005. "Pricing of Complementary Goods and Network Effects," Working Papers 05-04, NET Institute, revised Nov 2005. [Downloadable!]
    Other versions:
  2. Christopher R. Knittel & Victor Stango, 2006. "Strategic Incompatibility in ATM Markets," Working Papers 06-08, NET Institute, revised Sep 2006. [Downloadable!]
    Other versions:
  3. Matthew T. Clements & Hiroshi Ohashi, 2004. "Indirect Network Effects and the Product Cycle: Video Games in the U.S., 1994-2002," CIRJE F-Series CIRJE-F-261, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
    Other versions:
  4. Marc Rysman, 2003. "Differentiation Across Standards and Adoption Failure in 56K Modems," Working Papers 03-12, NET Institute, revised Dec 2003. [Downloadable!]
  5. Dranove, David & Gandal, Neil, 2003. "Surviving a Standards War: Lessons Learned from the Life and Death of DIVX," CEPR Discussion Papers 3935, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  6. James E. Prieger & Wei-Min Hu, 2006. "An Empirical Analysis of Indirect Network Effects in the Home Video Game Market," Working Papers 06-25, NET Institute, revised Oct 2006. [Downloadable!]
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