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The DVD vs. DIVX Standard War: Empirical Evidence of Vaporware

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Author Info
Neil Gandal (Tel Aviv University, University of California, Berkeley, and CEPR)
David Dranove (Northwestern University)
Abstract

In this paper, we empirically measure the effect of the DIVX preannouncement 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 in the DVD market and that the preannouncement of DIVX slowed down the adoption of DVD technology. This suggests that strategic preannouncements can indeed affect the outcome of a standards competition.

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Paper provided by Competition Policy Center, Institute for Business and Economic Research, UC Berkeley in its series Competition Policy Center, Working Paper Series with number CPC01-016.

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Date of creation: 01 Nov 2000
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Handle: RePEc:cdl:compol:cpc01-016

Note: oai:cdlib1:iber/cpc-1010
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Related research
Keywords: network effects; product preannouncements; standards; vaporware;

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  1. Michal Grajek, 2002. "Identification of Network Externalities in Markets for Non-Durables," CIG Working Papers FS IV 02-32, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG). [Downloadable!]
  2. Laura Rinaldi, 2008. "Estimation of network externalities and critical mass in the mobile telephone market: a panel data analysis of the OECD countries," Working Papers 1_2008, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy. [Downloadable!]
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This page was last updated on 2009-12-15.

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