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Adoptions and Orphans in the Early Microcomputer Market

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Author Info
Neil Gandal (Tel Aviv University)
Shane Greenstein (University of Illinois)
David Salant (GTE Laboratories)

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Abstract

In this paper we develop a model with (1) differentiated consumers, (2) endogenous adoption times, (3) technical uncertainty, and (4) alternative technologies sponsored by competing vendors. We identify conditions under which orphaning arises endogenously in a framework of dynamic competition. We then use the model to examine the development of the micro-computer market in the early 1980s, when the orphaning of a widely-adopted operating system occurred. We find that the data characterizing this event are consistent with our theoretical framework.

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Publisher Info
Paper provided by EconWPA in its series Industrial Organization with number 9502002.

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Length: 37 pages
Date of creation: 23 Feb 1995
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Handle: RePEc:wpa:wuwpio:9502002

Note: 37 pages LateX file, plus 4 figures in separate postscript file. To request a hard copy, send e-mail to Stella Padeh, Foerder Institute of Economic Research (foerder@ccsg.tau.ac.il)
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Church, Jeffrey & Gandal, Neil, 1992. "Network Effects, Software Provision, and Standardization," Journal of Industrial Economics, Blackwell Publishing, vol. 40(1), pages 85-103, March. [Downloadable!] (restricted)
  2. Joseph Farrell & Garth Saloner, 1985. "Installed Base and Compatibility With Implications for Product Preannouncements," Working papers 385, Massachusetts Institute of Technology (MIT), Department of Economics.
    Other versions:
  3. Bresnahan, Timothy F & Greenstein, Shane, 1999. "Technological Competition and the Structure of the Computer Industry," Journal of Industrial Economics, Blackwell Publishing, vol. 47(1), pages 1-40, March. [Downloadable!] (restricted)
    Other versions:
  4. Katz, Michael L & Shapiro, Carl, 1986. "Technology Adoption in the Presence of Network Externalities," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 822-41, August. [Downloadable!] (restricted)
  5. Church, J. & Gandal, N., 1991. "Complementary Network Externalities and Technological Adoption," Papers 5-91, Tel Aviv.
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  6. Chou, Chien-fu & Shy, Oz, 1990. "Network effects without network externalities," International Journal of Industrial Organization, Elsevier, vol. 8(2), pages 259-270, June. [Downloadable!] (restricted)
  7. Katz, Michael L & Shapiro, Carl, 1992. "Product Introduction with Network Externalities," Journal of Industrial Economics, Blackwell Publishing, vol. 40(1), pages 55-83, March. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Mitsuru Sunada, 2008. "Network effects with quality change: an empirical analysis of the Japanese mobile telecommunications market, 1995-2001," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(8), pages 657-674. [Downloadable!]
  2. 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!]
  3. repec:bep:eapadv:v:8:y:2008:i:1:p:1731-1731 is not listed on IDEAS
    Other versions:
  4. Stefan Mai, 2002. "International co-ordination of e-commerce," IWP Discussion Paper Series 03/2002, Institute for Economic Policy, Cologne, Germany. [Downloadable!]
  5. David Dranove & Neil Gandal, 2000. "The DVD vs. DIVX Standard War: Empirical Evidence of Vaporware," Department of Economics, Working Paper Series 1019, Department of Economics, Institute for Business and Economic Research, UC Berkeley. [Downloadable!]
  6. Christopher R. Knittel & Victor Stango, 2004. "Compatibility and Pricing with Indirect Network Effects: Evidence from ATMs," NBER Working Papers 10774, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Andrea Fosfuri & Marco S. Giarratana & Alessandra Luzzi, 2005. "Firm Assets and Investments in Open Source Software Products," DRUID Working Papers 05-10, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies. [Downloadable!]
  8. COLLA, Paolo & GARCIA, Filomena, 2004. "Technology adoption with forward looking agents," CORE Discussion Papers 2004041, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
  9. Tobias Kretschmer, 2005. "Competing technologies in the database management systems market," Working Papers 05-17, NET Institute, revised Oct 2005. [Downloadable!]
    Other versions:
  10. Dranove, David & Gandal, Neil, 2002. "The DVD Versus DIVX Standard War: Empirical Evidence of Network Effects and Preannouncement Effects," CEPR Discussion Papers 3634, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  11. Tobias Kretschmer & Katrin Muehlfeld, 2006. "Co-Opetition and Prelaunch in Standard-Setting for Developing Technologies," CEP Discussion Papers dp0742, Centre for Economic Performance, LSE. [Downloadable!]
  12. Chen, Derek H. C. & Dahlman, Carl J., 2004. "Knowledge and development : a cross-section approach," Policy Research Working Paper Series 3366, The World Bank. [Downloadable!]
  13. Chen, Derek H.C., 2004. "Gender equality and economic development : the role for information and communication technologies," Policy Research Working Paper Series 3285, The World Bank. [Downloadable!]
  14. Julio Orlando De Castro, 2004. "Piracy as Strategy? A Reexamination of Product Piracy," Working Papers Economia wp04-08, Instituto de Empresa, Area of Economic Environment. [Downloadable!]
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