An Empirical Analysis of Indirect Network Effects in the Home Video Game Market
AbstractWe explore the indirect network effect in the market for home video games. We examine the video game console makers’ strategic choice between increasing demand by lowering console price and by encouraging the growth of software variety. We also explore the existence of an applications barrier to entry in the console market, and find that there is little evidence for such a barrier. Finally, we assess the applicability of the model to out-of-sample situations, to look at whether our model and previous similar models can generalize to other markets for purposes of marketing or antitrust inquiry. We find that the model generalizes reasonably well to the Japanese market for the same generation of gaming systems, but poorly to previous generations in the US market.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by NET Institute in its series Working Papers with number 06-25.
Length: 46 pages
Date of creation: Oct 2006
Date of revision: Oct 2006
Contact details of provider:
Web page: http://www.NETinst.org/
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-12 (All new papers)
- NEP-COM-2006-11-12 (Industrial Competition)
- NEP-CUL-2006-11-12 (Cultural Economics)
- NEP-IPR-2006-11-12 (Intellectual Property Rights)
- NEP-MKT-2006-11-12 (Marketing)
- NEP-NET-2006-11-12 (Network Economics)
- NEP-SEA-2006-11-12 (South East Asia)
- NEP-TID-2006-11-12 (Technology & Industrial Dynamics)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Daniel Birke, 2009.
"The Economics Of Networks: A Survey Of The Empirical Literature,"
Journal of Economic Surveys,
Wiley Blackwell, vol. 23(4), pages 762-793, 09.
- Daniel Birke, 2008. "The economics of networks - A survey of the empirical literature," Occasional Papers 22, Industrial Economics Division.
- Gil, Ricard & Warzynski, Frederic, 2009.
"Vertical Integration, Exclusivity and Game Sales Performance in the U.S. Video Game Industry,"
09-19, University of Aarhus, Aarhus School of Business, Department of Economics.
- Ricard Gil & Frédèric Warzynski, 2010. "Vertical Integration, Exclusivity and Game Sales Performance in the US Video Game Industry," Working Papers 10-06, NET Institute, revised Sep 2010.
- Gil, Ricard & Warzynski, Frédéric, 2009. "Vertical Integration, Exclusivity and Game Sales Performance in the U.S. Video Game Industry," MPRA Paper 21049, University Library of Munich, Germany, revised Dec 2009.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nicholas Economides).
If references are entirely missing, you can add them using this form.