Third-party Provision of Conversion Technologies in Network Markets
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| Format: | Artículo científico |
| Sprache: | en |
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Universidad Alberto Hurtado
2009
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| _version_ | 1876463644381806592 |
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| author | Arnaud X. Varé |
| author_facet | Arnaud X. Varé |
| contents | Third-party Provision of Conversion Technologies in Network Markets Arnaud X. Varé Ralf W. Seifert Ingeniería tactics Converter third party standards war network externality In network markets, the provision of third-party converters is an important dimension of standards wars. In this paper, we develop a mathematical model to analyze the effects of third-party converter introduction on the adoption process of incumbents' base technologies and discuss managerial insights based on our model. We determine converter introduction strategies of third parties by establishing under what circumstances third parties may maximize their profit. We find that there exists an optimal introduction time for converters, which depends on a trade-off between conversion option and consumers' memory effect. The preferred conversion option is mostly two-way conversion. As a result of converter provision, converter introduction affects the de facto standardization process of the incumbents' base technologies by accelerating the lock-in process of the dominant technology. We then discuss how incumbents can anticipate and react to third-party converter introduction in order to reduce the third parties' incentive to introduce converters. Throughout the paper, we illustrate our analytical results with numerical examples. 2009 artículo científico 0718-2724 https://www.redalyc.org/articulo.oa?id=84711432001 en http://www.redalyc.org/revista.oa?id=847 Journal of Technology Management & Innovation application/pdf Universidad Alberto Hurtado Journal of Technology Management & Innovation (Chile) Num.2 Vol.4 |
| format | Artículo científico |
| id | redalyc_84711432001 |
| institution | Redalyc |
| language | en |
| publishDate | 2009 |
| publisher | Universidad Alberto Hurtado |
| spellingShingle | Third-party Provision of Conversion Technologies in Network Markets Arnaud X. Varé Ingeniería tactics Converter third party standards war network externality Third-party Provision of Conversion Technologies in Network Markets Arnaud X. Varé Ralf W. Seifert Ingeniería tactics Converter third party standards war network externality In network markets, the provision of third-party converters is an important dimension of standards wars. In this paper, we develop a mathematical model to analyze the effects of third-party converter introduction on the adoption process of incumbents' base technologies and discuss managerial insights based on our model. We determine converter introduction strategies of third parties by establishing under what circumstances third parties may maximize their profit. We find that there exists an optimal introduction time for converters, which depends on a trade-off between conversion option and consumers' memory effect. The preferred conversion option is mostly two-way conversion. As a result of converter provision, converter introduction affects the de facto standardization process of the incumbents' base technologies by accelerating the lock-in process of the dominant technology. We then discuss how incumbents can anticipate and react to third-party converter introduction in order to reduce the third parties' incentive to introduce converters. Throughout the paper, we illustrate our analytical results with numerical examples. 2009 artículo científico 0718-2724 https://www.redalyc.org/articulo.oa?id=84711432001 en http://www.redalyc.org/revista.oa?id=847 Journal of Technology Management & Innovation application/pdf Universidad Alberto Hurtado Journal of Technology Management & Innovation (Chile) Num.2 Vol.4 |
| title | Third-party Provision of Conversion Technologies in Network Markets |
| topic | Ingeniería tactics Converter third party standards war network externality |
| url | https://www.redalyc.org/articulo.oa?id=84711432001 |