Working Paper: CEPR ID: DP3634
Authors: David Dranove; Neil Gandal
Abstract: In this Paper, we empirically test for network effects and preannouncement effects 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. The data is generally consistent with the hypothesis that the preannouncement of DIVX temporarily slowed down the adoption of DVD technology.
Keywords: network effects; product preannouncements; standards
JEL Codes: K21; L82
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Network effects (D85) | DVD adoption (Y40) |
| Demise of DivX (G35) | DVD sales (L42) |
| DivX preannouncement (Y60) | DVD adoption (Y40) |