Strategic product pre-announcements in markets with network effects

Jay Pil Choi; Eirik Gaard Kristiansen; Jae Nahm

doi:10.15057/30359

Strategic product pre-announcements in markets with network effects

Jay Pil Choi, Eirik Gaard Kristiansen, Jae Nahm

Department of Economics

Research output: Contribution to journal › Article › peer-review

2 Citations (Scopus)

Abstract

Firms often announce new products well in advance of their actual market availability. The incentives for pre-announcements are conceived to be 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 strategically make false announcements. We also discuss their implications for consumer welfare.

Original language	English
Pages (from-to)	1-20
Number of pages	20
Journal	Hitotsubashi Journal of Economics
Volume	60
Issue number	1
DOIs	https://doi.org/10.15057/30359
Publication status	Published - 2019

Keywords

D8
Network effects
Product pre-announcements
Reputation JEL Classification Codes: L1
Technology adoption

ASJC Scopus subject areas

Business, Management and Accounting(all)
Economics and Econometrics

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10.15057/30359

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abstract = "Firms often announce new products well in advance of their actual market availability. The incentives for pre-announcements are conceived to be 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 strategically make false announcements. We also discuss their implications for consumer welfare.",

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AU - Nahm, Jae

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PY - 2019

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N2 - Firms often announce new products well in advance of their actual market availability. The incentives for pre-announcements are conceived to be 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 strategically make false announcements. We also discuss their implications for consumer welfare.

AB - Firms often announce new products well in advance of their actual market availability. The incentives for pre-announcements are conceived to be 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 strategically make false announcements. We also discuss their implications for consumer welfare.

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KW - Reputation JEL Classification Codes: L1

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Strategic product pre-announcements in markets with network effects

Abstract

Keywords

ASJC Scopus subject areas

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