Indirect Network Effects and the Product Cycle: Video Games in the U.S., 1994-2002
28 Pages Posted: 3 Jan 2006
There are 2 versions of this paper
Indirect Network Effects and the Product Cycle: Video Games in the U.S., 1994-2002
Abstract
We examine the importance of indirect network effects in the U.S. video game market between 1994 and 2002. The diffusion of game systems is analyzed by the interaction between console adoption decisions and software supply decisions. Estimation results suggest that introductory pricing is an effective practice at the beginning of the product cycle, and expanding software variety becomes more effective later. We also find a degree of inertia in the software market that does not exist in the hardware market. This observation implies that software providers continue to exploit the installed base of hardware users after hardware demand has slowed.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
By Garth Saloner and Andrea Shepard
-
Empirical Analysis of Indirect Network Effects in the Market for Personal Digital Assistants
By Harikesh Nair, Pradeep K. Chintagunta, ...
-
Network Effects and Competition: An Empirical Analysis of the Home Video Game Industry
By Venkatesh Shankar and Barry L. Bayus
-
Indirect Network Effects and the Product Cycle: Video Games in the U.S., 1994-2002
-
The Dvd Versus Divx Standard War: Empirical Evidence of Network Effects and Preannouncement Effects
By David Dranove and Neil Gandal
-
The Role of Network Externalities in the U.S. Vcr Market in 1978-86
-
Entry into Platform-Based Markets
By Feng Zhu and Marco Iansiti
-
An Empirical Analysis of Indirect Network Effects in the Home Video Game Market
By James E. Prieger and Wei-min Hu
-
Indirect Network Effects in New Product Growth
By S. Stremersch, Gerard J. Tellis, ...