Third-party Provision of Conversion Technologies in Network Markets
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 in...
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| Lenguaje: | English |
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Universidad Alberto Hurtado. Facultad de Economía y Negocios
2009
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| Acceso en línea: | http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-27242009000200001 |
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oai:scielo:S0718-272420090002000012009-09-23Third-party Provision of Conversion Technologies in Network MarketsVaré,Arnaud XSeifert,Ralf W converter de facto standardization process network externality standards war tactics technology adoption third party 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.info:eu-repo/semantics/openAccessUniversidad Alberto Hurtado. Facultad de Economía y NegociosJournal of technology management & innovation v.4 n.2 20092009-07-01text/htmlhttp://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-27242009000200001en10.4067/S0718-27242009000200001 |
| institution |
Scielo Chile |
| collection |
Scielo Chile |
| language |
English |
| topic |
converter de facto standardization process network externality standards war tactics technology adoption third party |
| spellingShingle |
converter de facto standardization process network externality standards war tactics technology adoption third party Varé,Arnaud X Seifert,Ralf W Third-party Provision of Conversion Technologies in Network Markets |
| description |
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. |
| author |
Varé,Arnaud X Seifert,Ralf W |
| author_facet |
Varé,Arnaud X Seifert,Ralf W |
| author_sort |
Varé,Arnaud X |
| title |
Third-party Provision of Conversion Technologies in Network Markets |
| title_short |
Third-party Provision of Conversion Technologies in Network Markets |
| title_full |
Third-party Provision of Conversion Technologies in Network Markets |
| title_fullStr |
Third-party Provision of Conversion Technologies in Network Markets |
| title_full_unstemmed |
Third-party Provision of Conversion Technologies in Network Markets |
| title_sort |
third-party provision of conversion technologies in network markets |
| publisher |
Universidad Alberto Hurtado. Facultad de Economía y Negocios |
| publishDate |
2009 |
| url |
http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-27242009000200001 |
| work_keys_str_mv |
AT varearnaudx thirdpartyprovisionofconversiontechnologiesinnetworkmarkets AT seifertralfw thirdpartyprovisionofconversiontechnologiesinnetworkmarkets |
| _version_ |
1714203192884985856 |