The Dvd vs. Divx Standard War: Empirical Evidence of Vaporware
UC Berkeley, Center for Competition Policy Working Paper No. CPC00-16
32 Pages Posted: 19 Feb 2004
Date Written: November 2000
In this paper, we empirically measure the effect of the DIVX preannouncement 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 in the DVD market and that the preannouncement of DIVX slowed down the adoption of DVD technology. This suggests that strategic preannouncements can indeed affect the outcome of a standards competition.
Keywords: Network effects, product preannouncements, standards, vaporware
JEL Classification: K21, L82
Suggested Citation: Suggested Citation