Strategic Product Pre-announcements in Markets with Network Effects
Jay Pil Choi,
Eirik Gaard Kristiansen and
Hitotsubashi Journal of Economics, 2019, vol. 60, issue 1, 1-20
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)
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Persistent link: https://EconPapers.repec.org/RePEc:hit:hitjec:v:60:y:2019:i:1:p:1-20
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