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Estimating The Effect Of Subscription based Streaming Services On The Demand For Game Consoles

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  • Tung Yu Marco Chan
  • Yue Zhang
  • Tsun Yi Yeung

Abstract

In this paper, we attempt to estimate the effect of the implementation of subscription-based streaming services on the demand of the associated game consoles. We do this by applying the BLP demand estimation model proposed by Berry (1994). This results in a linear demand specification which can be identified using conventional identification methods such as instrumental variables estimation and fixed-effects models. We find that given our dataset, the two-stage least squares (2SLS) regression provides us with convincing estimates that subscription-based streaming services does have a positive effect on the demand of game consoles as proposed by the general principle of complementary goods.

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  • Tung Yu Marco Chan & Yue Zhang & Tsun Yi Yeung, 2020. "Estimating The Effect Of Subscription based Streaming Services On The Demand For Game Consoles," Papers 2012.12704, arXiv.org.
    • Handle: RePEc:arx:papers:2012.12704
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    References listed on IDEAS

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    1. Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
    2. Glazer, Amihai & Hassin, Refael, 1982. "On the economics of subscriptions," European Economic Review, Elsevier, vol. 19(2), pages 343-356.
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