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The Dvd‐vs.‐Divx Standard War: Empirical Evidence of Network Effects and Preannouncement Effects

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  • David Dranove
  • Neil Gandal

Abstract

We test empirically for network effects and preannouncement effects 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. The data are generally consistent with the hypothesis that the preannouncement of DIVX temporarily slowed down the adoption of DVD technology.

Suggested Citation

  • David Dranove & Neil Gandal, 2003. "The Dvd‐vs.‐Divx Standard War: Empirical Evidence of Network Effects and Preannouncement Effects," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(3), pages 363-386, September.
  • Handle: RePEc:bla:jemstr:v:12:y:2003:i:3:p:363-386
    DOI: 10.1111/j.1430-9134.2003.00363.x
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    References listed on IDEAS

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    3. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    4. Chou, Chien-fu & Shy, Oz, 1990. "Network effects without network externalities," International Journal of Industrial Organization, Elsevier, vol. 8(2), pages 259-270, June.
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