Modeling indirect network effects in new product growth

Project Information

Grant agreement ID: HPMF-CT-2002-01538

Project closed

Start date 1 September 2002

End date 31 August 2004

Funded under

• Programme for research, technological development and demonstration on "Improving the human research potential and the socio-economic knowledge base" (1998-2002)

Total cost € 132 750,00

EU contribution € 132 750,00

Coordinated by

ERASMUS RESEARCH INSTITUTE OF MANAGEMENT
Netherlands

Objective

This research aims to carry new product diffusion models in new directions to accommodate for the simultaneous study of the growth in hardware sales and software availability (indirect network effects ). The focal question is: what is the role of the availability of software/content (e.g. DVD movies) in the growth of hardware (e.g. DVD Player) sales? This study contributes to the literature in three ways:
(a) specification of an innovative diffusion model which accounts for indirect network effects;
(b) theory development on the role of indirect network effects in new product growth, more specifically:
(1 ) on the variation of indirect network effects over the product life cycle;
(2) on the chicken-and-egg problem of which comes first software availability or hardware sales; (c) elaborate empirical testing of the phenomenon using new data on several consumer electronics; The study method is archival analysis. This is a method of assembling, critically examining and summarizing records of the past. We will collect data from private archives, public research reports, government reports, magazines and newspapers. So far, we have collected data on seven hardware/ software markets in consumer electronics. The model we develop is a multivariate regime-switching model, which is new to marketing and management science. The issue we address in this consistent research program is considered a pressing question by leading authors and research institutes in the field.

Fields of science (EuroSciVoc)

CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques.

• natural sciences › computer and information sciences › software
• humanities › arts › modern and contemporary art › cinematography

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Programme(s)

• FP5-HUMAN POTENTIAL - Programme for research, technological development and demonstration on "Improving the human research potential and the socio-economic knowledge base" (1998-2002)

Topic(s)

Data not available

Call for proposal

Data not available

Funding Scheme

RGI - Research grants (individual fellowships)

Coordinator

ERASMUS RESEARCH INSTITUTE OF MANAGEMENT

• EU contribution: No data
• Address: School of Economics, Burg. Oudlaan 50 ; 3062 PA ROTTERDAM ; Netherlands
• Total cost: No data