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| Author: | Dranove, D. Gandal, N. |
| Title: | The DVD-VS.-DIVX Standard War: Empirical Evidence of Network Effects and Preannouncement Effects |
| Journal: | Journal of Economics & Management Strategy
2003 : FALL, VOL. 12:3, p. 363-386 |
| Index terms: | STANDARDS COMPETITION NETWORKS TECHNOLOGY |
| Language: | eng |
| Abstract: | The authors test empirically for network effects and preannouncement effects in the DVD market. The authors do this by measuring the effect of potential (incompatible) competition on a network undergoing growth. The authors 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. The authors stress the key role played by the Internet. Chat groups helped consumers communicate information and coordinate actions. Since many of the early adopters were also Internet users, the large number of active DVD and DIVX web sites conveyed very useful information to potential adopters in real time. |
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