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NETWORK EFFECTS AND COMPETITION:

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Issue:

Technology

 

Written by:

Elizabeth H

 

Date added:

July 31, 2016

 

Level:

University

 

Grade:

A

 

No of pages / words:

3 / 762

 

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7672 times

 

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While theoretical research has addressed all three of these categories, empirical research has been limited to the first and second categories of questions (e.g., see the reviews in David and Greenstein 1990; Liebowitz and Margolis 1994; Economides 2001). Empirical efforts supporting the existence of network effects for a single product technology show that a larger network size is related to higher minicomputer sales (Hartman and Teece 1990), higher likelihood of adopting a new telecommunications technology (Majumdar and Venkataraman 1998), and quicker adoption of a new banking technology (Saloner and Sheppard 1995)...
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In addition, Gandal (1994; 1995) and Brynjolfsson and Kemerer (1996) use a hedonic price model to show that consumers are willing to pay higher prices for software products that are compatible with the dominant product standard, i.e., the product with the larger customer network. However, with the exception of a few industry case studies (e...
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General issues of this essay:
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