Abstract

http://ssrn.com/abstract=1647037
 
 

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Measuring Network Effects in a Dynamic Environment


Gautam Gowrisankaran


University of Arizona - Eller College of Management; National Bureau of Economic Research (NBER)

Marc Rysman


Boston University - Department of Economics

Minsoo Park


College of Economics, Sungkyunkwan University

May 1, 2010

NET Institute Working Paper No. 10-03

Abstract:     
This paper proposes methods for identifying indirect network effects with dynamically optimizing consumers purchasing a durable hardware good and associated software. We apply this model to a data drawn from the DVD player and titles markets. We observe model-level prices, sales and characteristics of DVD players and sales and availability of DVDs at the level of the month for 10 years. We augment these aggregate data with household survey data on player holdings. In our model, forward looking consumers buy possibly multiple DVD players over time and benefit from the evolution of the titles market. We address issues of clustering, spurious correlation and endogeneity.

Number of Pages in PDF File: 28

Keywords: Empirics, Network Effects, DVD players

JEL Classification: C25, C61, D91, L11, L12, L16, L68, M31

working papers series


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Date posted: July 31, 2010  

Suggested Citation

Gowrisankaran, Gautam and Rysman, Marc and Park, Minsoo, Measuring Network Effects in a Dynamic Environment (May 1, 2010). NET Institute Working Paper No. 10-03. Available at SSRN: http://ssrn.com/abstract=1647037 or http://dx.doi.org/10.2139/ssrn.1647037

Contact Information

Gautam Gowrisankaran (Contact Author)
University of Arizona - Eller College of Management ( email )
McClelland Hall
P.O. Box 210108
Tucson, AZ 85721-0108
United States
HOME PAGE: http://econ.arizona.edu/faculty/gowrisankaran.asp
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Marc Rysman
Boston University - Department of Economics ( email )
270 Bay State Road
Boston, MA 02215
United States
617-353-3086 (Phone)
617-353-4449 (Fax)
Minsoo Park
College of Economics, Sungkyunkwan University ( email )
25-2 25-2, Sungkyunkwan-Ro, Jongno-Gu
Seoul
Korea
+82-02-760-0427 (Phone)
+82-2-760-0946 (Fax)
Feedback to SSRN


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References:  36
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