Title: | Strategic Product Pre-announcements in Markets with Network Effects |
Authors: | Choi, Jay Pil - Michigan State University Kristiansen, Eirik Gaard - Michigan State University Nahm, Jae - HKUST, Hong Kong |
Keywords: | product pre-announcements, network effects, cheap talk, reputation |
Issue Date: | 2005 |
Series/Report no.: | NET Institute Working Paper;05-09 |
Abstract: | It is a widely adopted practice for firms to announce new products well in advance of actual market availability. The incentives for pre-announcements are stronger in markets with network effects because they can be used to induce the delay of consumers' purchases and forestall the build-up of rival products' 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 are allowed to strategically make false announcements. We also discuss their implications for consumer welfare and anti-trust policy. |
URI: | http://hdl.handle.net/2451/28420 |
Appears in Collections: | NET Institute Working Papers Series |
Files in This Item:
File | Description | Size | Format | |
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Choi_Kristiansen_Nahm_05-09.pdf | 400.93 kB | Adobe PDF | View/Open |
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