Estimating Network Effects in a Dynamic Environment

Gautam Gowrisankaran (), Minsoo Park () and Marc Rysman
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Gautam Gowrisankaran: University of Arizona

No 10-03, Working Papers from NET Institute

Abstract: This paper proposes methods for identifying indirect network effects with dynamically optimizing consumers purchasing a durable hardware good and associated software. We apply this model to data drawn from the DVD player and titles markets. We observe model-level prices, sales and characteristics of DVD players and sales and availability of DVDs at the level of the month for 10 years. We augment these aggregate data with household survey data on player holdings. In our model, forward looking consumers buy possibly multiple DVD players over time and benefit from the evolution of the titles market. We address issues of clustering, spurious correlation and endogeneity.

Keywords: empirics; network effects; DVD players (search for similar items in EconPapers)
JEL-codes: C25 C61 D91 L11 L12 L16 L68 M31 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2010-05, Revised 2010-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:net:wpaper:1003

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