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Strategic Product Pre-announcements in Markets with Network Effects

Author

Listed:
  • Choi, Jay Pil
  • Kristiansen, Eirik Gaard
  • Nahm, Jae

Abstract

Firms often announce new products well in advance of their actual market availability. The incentives for pre-announcements are conceived to be stronger in markets with network effects because they can be used to induce the delay of consumersʼ purchases and forestall the build-up of rival productsʼ installed bases. However, such announcements often are not fulfilled, raising antitrust concerns. We analyze the effects of product pre-announcements in the presence of network effects when firms strategically make false announcements. We also discuss their implications for consumer welfare.

Suggested Citation

  • Choi, Jay Pil & Kristiansen, Eirik Gaard & Nahm, Jae, 2019. "Strategic Product Pre-announcements in Markets with Network Effects," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 60(1), pages 1-20, June.
    • Handle: RePEc:hit:hitjec:v:60:y:2019:i:1:p:1-20
    DOI: 10.15057/30359
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    References listed on IDEAS

    as
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    5. Jay Pil Choi, 1994. "Irreversible Choice of Uncertain Technologies with Network Externalities," RAND Journal of Economics, The RAND Corporation, vol. 25(3), pages 382-401, Autumn.
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    7. Jay Pil Choi & Eirik Gaard Kristiansen & Jae Nahm, 2005. "An Economic Analysis of Product Pre-announcements," CESifo Economic Studies, CESifo Group, vol. 51(2-3), pages 299-319.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    network effects; technology adoption; product pre-announcements; reputation;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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