The DVD vs. DIVX Standard War: Network Effects and Empirical Evidence of Vaporware
AbstractIn most cases, the premature announcement of a future product cannot be anti-competitive. When there are network effects, however, firms may have incentives to strategically prenannounce products; such preannouncements are often referred to as "vaporware." Anticompetitive vaporware allegations have been leveled at IBM and Microsoft. Despite the antitrust concern about vaporware, there is no empirical work on the issue. In this paper, we empirically test for network effects and vaporware effects in the DVD market. We find that there are network effects in the DVD market and that the preannouncement by DIVX indeed slowed down the adoption of DVD technology.
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Bibliographic InfoPaper provided by Tel Aviv in its series Papers with number 14-99.
Length: 18 pages
Date of creation: 1999
Date of revision:
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Postal: Israel TEL-AVIV UNIVERSITY, THE FOERDER INSTITUTE FOR ECONOMIC RESEARCH, RAMAT AVIV 69 978 TEL AVIV ISRAEL.
Web page: http://econ.tau.ac.il/research/foerder.asp
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NETWORK ANALYSIS ; ADVERTISING ; MANAGEMENT ; INDUSTRIAL PROMOTION;
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- K2 - Law and Economics - - Regulation and Business Law
- L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
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- Liran Einav & S. Ravid, 2009. "Stock market response to changes in movies’ opening dates," Journal of Cultural Economics, Springer, vol. 33(4), pages 311-319, November.
- Timothy F Bresnahan, 2004. "Network Effects in the Microsoft Case," Levine's Working Paper Archive 228400000000000008, David K. Levine.
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