Abstract

http://ssrn.com/abstract= 941223
 
 

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An Empirical Analysis of Indirect Network Effects in the Home Video Game Market


James E. Prieger


Pepperdine University - School of Public Policy

Wei-Min Hu


University of California, Davis

October 1, 2006

NET Institute Working Paper No. 06-25

Abstract:     
We explore the indirect network effect in the market for home video games. We examine the video game console makers' strategic choice between increasing demand by lowering console price and by encouraging the growth of software variety. We also explore the existence of an applications barrier to entry in the console market, and find that there is little evidence for such a barrier. Finally, we assess the applicability of the model to out-of-sample situations, to look at whether our model and previous similar models can generalize to other markets for purposes of marketing or antitrust inquiry. We find that the model generalizes reasonably well to the Japanese market for the same generation of gaming systems, but poorly to previous generations in the US market.

Number of Pages in PDF File: 46

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Date posted: November 2, 2006 ; Last revised: August 30, 2014

Suggested Citation

Prieger, James E. and Hu, Wei-Min, An Empirical Analysis of Indirect Network Effects in the Home Video Game Market (October 1, 2006). NET Institute Working Paper No. 06-25. Available at SSRN: http://ssrn.com/abstract=941223 or http://dx.doi.org/10.2139/ssrn.941223

Contact Information

James E. Prieger (Contact Author)
Pepperdine University - School of Public Policy ( email )
24255 Pacific Coast Highway
Malibu, CA 90263
United States
3105067150 (Phone)
3105067494 (Fax)
HOME PAGE: http://faculty.pepperdine.edu/jprieger/
Wei-Min Hu
University of California, Davis ( email )
One Shields Avenue
Davis, CA 95616
United States
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