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Adoptions and Orphans in the Early Microcomputer Market

Author

Listed:
  • Neil Gandal

    (Tel Aviv University)

  • Shane Greenstein

    (University of Illinois)

  • David Salant

    (GTE Laboratories)

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.

Suggested Citation

  • Neil Gandal & Shane Greenstein & David Salant, 1995. "Adoptions and Orphans in the Early Microcomputer Market," Industrial Organization 9502002, University Library of Munich, Germany.
    • 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

    as
    1. Church, Jeffrey & Gandal, Neil, 1992. "Network Effects, Software Provision, and Standardization," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 85-103, March.
    2. Bresnahan, Timothy F & Greenstein, Shane, 1999. "Technological Competition and the Structure of the Computer Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 47(1), pages 1-40, March.
    3. Church, Jeffrey & Gandal, Neil, 1993. "Complementary network externalities and technological adoption," International Journal of Industrial Organization, Elsevier, vol. 11(2), pages 239-260, June.
    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.
    5. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    6. 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.
    7. 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 822-841, August.
    8. Katz, Michael L & Shapiro, Carl, 1992. "Product Introduction with Network Externalities," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 55-83, March.
    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • L - Industrial Organization

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