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The DVD vs. DIVX Standard War: Empirical Evidence of Vaporware

Author

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  • Dranove, David
  • Gandal, Neil

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.

Suggested Citation

  • Dranove, David & Gandal, Neil, 2000. "The DVD vs. DIVX Standard War: Empirical Evidence of Vaporware," Department of Economics, Working Paper Series qt0979867q, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    • Handle: RePEc:cdl:econwp:qt0979867q
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    Cited by:

    1. van Wegberg, Marc, 2004. "Compatibility choice by multi-market firms," Information Economics and Policy, Elsevier, vol. 16(2), pages 235-254, June.
    2. Laura Rinaldi, 2008. "Estimation of network externalities and critical mass in the mobile telephone market: a panel data analysis of the OECD countries," Working Papers 1_2008, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    3. Michal Grajek, 2002. "Identification of Network Externalities in Markets for Non-Durables," CIG Working Papers FS IV 02-32, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).

    More about this item

    Keywords

    network effects; product preannouncements; standards; vaporware;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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