İnceoğlu, Fırat and Park, Minsoo (2010) Diffusion of a new product under network effects: the U.S. DVD market. (Accepted/In Press)
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Abstract
We formulate a model that captures the inter-dependence between hardware demand and software supply �indirect network effect - in the DVD industry. The identification of the network effect comes from the difference in software availability across two different formats: VHS and DVD. We find that a 1% increase in the number of DVD titles raises the demand for DVD players by 0.87%. Simultaneously, a 1% increase in video player ownership leads to a 0.16%
increase in the variety of video titles. Our simulations show that hardware manufacturers might be able to internalize the network externality to increase total industry revenues.
Item Type: | Article |
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Uncontrolled Keywords: | Network effects; DVD; Discrete Choice Models |
Subjects: | H Social Sciences > HB Economic Theory > HB135-147 Mathematical economics. Quantitative methods H Social Sciences > HD Industries. Land use. Labor > HD0045-45.2 Technological innovations |
Divisions: | Faculty of Arts and Social Sciences > Academic programs > Economics Faculty of Arts and Social Sciences |
Depositing User: | Fırat İnceoğlu |
Date Deposited: | 05 Oct 2010 09:34 |
Last Modified: | 26 Apr 2022 08:40 |
URI: | https://research.sabanciuniv.edu/id/eprint/14671 |
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- Diffusion of a new product under network effects: the U.S. DVD market. (deposited 05 Oct 2010 09:34) [Currently Displayed]