DP3634 The DVD Versus DIVX Standard War: Empirical Evidence of Network Effects and Preannouncement Effects
| Author(s): | David Dranove, Neil Gandal |
| Publication Date: | November 2002 |
| Keyword(s): | network effects, product preannouncements, standards |
| JEL(s): | K21, L82 |
| Programme Areas: | Industrial Organization |
| Link to this Page: | cepr.org/active/publications/discussion_papers/dp.php?dpno=3634 |
In this Paper, we empirically test 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 is generally consistent with the hypothesis that the preannouncement of DIVX temporarily slowed down the adoption of DVD technology.