The Dvd Versus Divx Standard War: Empirical Evidence of Network Effects and Preannouncement Effects

37 Pages Posted: 11 Dec 2002

See all articles by David Dranove

David Dranove

Northwestern University - Kellogg School of Management

Neil Gandal

Berglas School of Economics, Tel Aviv University; Centre for Economic Policy Research (CEPR)

Date Written: November 2002

Abstract

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.

Keywords: product preannouncements, standards, network effects

JEL Classification: K21, L82

Suggested Citation

Dranove, David and Gandal, Neil, The Dvd Versus Divx Standard War: Empirical Evidence of Network Effects and Preannouncement Effects (November 2002). CEPR Discussion Paper No. 3634. Available at SSRN: https://ssrn.com/abstract=361041

David Dranove

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States
847-491-8682 (Phone)
847-467-1777 (Fax)

Neil Gandal (Contact Author)

Berglas School of Economics, Tel Aviv University ( email )

Tel Aviv University
Tel Aviv 69978
Israel
+972 3 640 9907 (Phone)
+972 3 640 9908 (Fax)

HOME PAGE: http://www.neilgandal.com/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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