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

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 2000

Abstract

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

Dranove, David and Gandal, Neil, The Dvd vs. Divx Standard War: Empirical Evidence of Vaporware (November 2000). UC Berkeley, Center for Competition Policy Working Paper No. CPC00-16. Available at SSRN: https://ssrn.com/abstract=502842 or http://dx.doi.org/10.2139/ssrn.502842

David Dranove (Contact Author)

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

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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