Empirically Testing for Indirect Network Externalities in the LCD Television Market

22 Pages Posted: 9 Nov 2008

See all articles by Patrick A. Scholten

Patrick A. Scholten

Bentley University - Department of Economics

Jeffrey A. Livingston

Bentley University - Department of Economics

David Ortmeyer

Bentley University

Wilson Wong

Bentley University

Date Written: November 4, 2008

Abstract

This paper examines price data on over 222 LCD televisions to estimate indirect network effects arising from two sources. First, we conjecture that the disconnect between the timing of when broadcasters are required to convert to an only-digital-signal world and when television manufacturers are required to have an ATSC digital tuner install on all new televisions has created an indirect network effect whereby television that are backward compatible with the NTSC analog QAM and VSB-8 systems have short-run value. Over time, however, we argue that the ATSC digital tuner will become more valuable. The second indirect network effect we estimate stems from the number and types of ports available on LCD televisions. In each case, we find statistically significant evidence for the presence of indirect network effects in the market for LCD televisions.

Keywords: HDTV, Internet, Connectivity, Compatibility, Indirect Network Externalities

JEL Classification: L81, L86, M21

Suggested Citation

Scholten, Patrick A. and Livingston, Jeffrey A. and Ortmeyer, David and Wong, Wilson, Empirically Testing for Indirect Network Externalities in the LCD Television Market (November 4, 2008). NET Institute Working Paper No. 08-40. Available at SSRN: https://ssrn.com/abstract=1296149 or http://dx.doi.org/10.2139/ssrn.1296149

Patrick A. Scholten (Contact Author)

Bentley University - Department of Economics ( email )

175 Forest Street
Waltham, MA 02452-4705
United States

Jeffrey A. Livingston

Bentley University - Department of Economics ( email )

175 Forest Street
Waltham, MA 02452-4705
United States
781-891-2538 (Phone)
781-891-2896 (Fax)

HOME PAGE: http://works.bepress.com/jeffrey_livingston/

David Ortmeyer

Bentley University ( email )

175 Forest Street
Waltham, MA 02452-4705
United States
781 891-2157 (Phone)

Wilson Wong

Bentley University ( email )

175 Forest Street
Waltham, MA 02145
United States
781-891-2033 (Phone)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
62
Abstract Views
718
rank
374,287
PlumX Metrics