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Strategic Product Pre-announcements in Markets with Network Effects

Jay Pil Choi, Eirik Gaard Kristiansen and Jae Nahm

Hitotsubashi Journal of Economics, 2019, vol. 60, issue 1, 1-20

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 consumersʼ purchases and forestall the build-up of rival productsʼ 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.

Keywords: network effects; technology adoption; product pre-announcements; reputation (search for similar items in EconPapers)
JEL-codes: L1 D8 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.15057/30359

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Handle: RePEc:hit:hitjec:v:60:y:2019:i:1:p:1-20