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Strategic Product Pre-announcements in Markets with Network Effects

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It is a widely adopted practice for firms to announce new products well in advance of actual market availability. The incentives for pre-announcements are stronger in markets with network effects because they can be used to induce the delay of consumers’ purchases and forestall the build-up of rival products’ installed bases. However, such announcements often are not fulfilled, raising antitrust concerns. We analyze the effects of product pre-announcements in the presence of network effects when firms are allowed to strategically make false announcements. We also discuss their implications for consumer welfare and anti-trust policy.

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  • Jay Pil Choi & Eirik Gaard Kristiansen & Jae Nahm, 2005. "Strategic Product Pre-announcements in Markets with Network Effects," Working Papers 05-09, NET Institute, revised Sep 2005.
    • Handle: RePEc:net:wpaper:0509
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    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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