When Technologies Compete: The Role of Externalities in Nonlinear Market Response

Redmond, William H.

doi:10.1111/1540-5885.830170

Cited by 27 publications

(38 citation statements)

References 20 publications

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“…A larger user population means that there are more opportunities to share information, support, and content with others (Watanabe and Hobo 2004). Prior research has also found that when consumers know that network externalities exist, they are more likely to influence their friends and relatives to adopt the product (Redmond 1991) than when network externalities are absent.…”

Section: Moderating Effectsmentioning

confidence: 99%

Erratum to: Relationships among time orientation, consumer innovativeness, and innovative behavior: the moderating role of product characteristics

Karande

Merchant

Sivakumar

2011

AMS Rev

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Consumer innovativeness is a critical factor that determines the success of new product introductions. An important but underexplored antecedent of consumer innovativeness is time orientation. In this article, we propose a conceptual model of the relationships among time orientation, consumer innovativeness, and consumer innovative behavior. We further examine the moderating role of several important product characteristics on these relationships. These characteristics include (1) newness of the product, (2) product complexity, (3) network externalities, and (4) the utilitarian versus expressive nature of the product. We develop a series of research propositions to explicate the relationships in our conceptual model. We delineate the substantive and managerial implications by linking the variables through a comprehensive framework and provide future research directions.

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Section: Moderating Effectsmentioning

confidence: 99%

Erratum to: Relationships among time orientation, consumer innovativeness, and innovative behavior: the moderating role of product characteristics

Karande

Merchant

Sivakumar

2011

AMS Rev

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“…Therefore, it is natural to assess the gains from this complexity by benchmarking our approach against simpler and less-demanding models that can also address network externality effects. We compare our model against two benchmark models: the analogical diffusion model of Bayus (1993) and the Positive Feedback Market Share Model proposed by Redmond (1991). The Bayus Model: Bayus (1993) uses historical data on sales and prices of 27 consumer durables to develop a product segmentation scheme based on demand parameters as well as marketing and manufacturing related variables.…”

Section: Benchmarking Validation and Robustness To Assumptionsmentioning

confidence: 99%

Modeling the Evolution of Markets with Indirect Network Externalities: An Application to Digital Television

1999

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The usefulness of a technology product for an end-user often depends on the availability of complementary software products and services. Computers require software, cameras require film, and DVD players require movie programming in order for customers to value the whole product. This phenomenon, where the demand for hardware products is mediated by the supply of complementary software products, is called an network externality. Indirect network externalities create a two-way contingency between the demand for the hardware product and the supply of software products, and result in a strategic interdependence between the actions of hardware manufacturers and the actions of software providers. Indirect network externalities are gaining economic significance in technology markets, because hardware and software are typically provided by independent firms, and both sets of firms have an incentive to free-ride on each others' demand creation efforts. Despite the ubiquity of this phenomenon, it has largely been ignored in the marketing science literature. We present a conceptual and operational model for the evolution of markets with indirect network externalities. The key feature of our framework is to model the between the actions of hardware manufacturers and software complementors, created by the of consumer demand for the whole product on the actions of manufacturers as well as complementors. In addition, we incorporate marketing-mix effects on consumer response, as well as heterogeneity in consumer preferences for hardware and software attributes. We model consumer response using a latent-class choice model. To estimate the complementor response functions, we use a modified Delphi technique that allows us to convert qualitative response data into quantitative response functions. We integrate the consumer and complementor response models to create a simulation model that generates forecasts of market shares and sales volumes for competing technologies, as a function of marketing-mix effects and exogenously specified regulatory scenarios. The modeling framework is of interest to new product modelers interested in creating empirical models and decision-support systems for forecasting demand in technology markets characterized by indirect network externalities. The decision-support aspects of the modeling framework should appeal to managers interested in understanding and quantifying the complex interplay between hardware manufacturers and software complementors in the evolution of markets with indirect network externalities. We present an application of the modeling framework to the U.S. digital television industry, and use the framework to characterize the competition among analog and digital TV technologies. Our results suggest that complementor actions play an important role in the acceptance of digital TV technologies in general, and high definition television (HDTV) in particular. We find that forecasts that ignore the influence of indirect network externalities would be seriously biased in favor of HDTV. We ill...

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“…Vários estudos Perugini & Bagozzi, 2001;Fekadu & Kraft, 2001) já comprovaram a influência das pressões normativas sob a intenção de compra e que tal relação é ainda mais forte quando se refere a aspectos ligados à aceitação e uso de produtos ou serviços com inovações (Shurmer, 1993;Westland, 1992;Redmond, 1991;Shankar & Bayus, 2004 Davis (1989). Seu objetivo inicial era o de apresentar um instrumento para prever a probabilidade de uma nova tecnologia ser adotada dentro de um grupo ou uma organização.…”

Section: Modelos De Aceitação De Inovações Tecnológicas (Tam E Tra)unclassified

O Impacto da Abordagem de Vendas na Aceitação de Produtos com Inovações Tecnológicas

Grohmann¹,

Battistella²,

Velter³

2013

JISTEM USP

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With the intention to verify the influence of sales approaches in the process of acceptance and use of products with technological innovations, a survey using the Technology Acceptance Model (TAM) and the Theory of Reasoned Action (TRA) was made. Through structural equation modeling, it was identified the relationships among the three sales approaches (competition focus, product focus and customer focus) and the constructs of the model (perceived usefulness, perceived ease, attitude to use, intention to use, current use and normative pressure). The results confirmed six of the twelve hypotheses: a strategy focused on competition interferes with the relationship between utility and attitude of use (H1b) and the relationship between normative pressure and purchase intention (H6); strategy with focus on product interferes with relations between utility usage and attitude (H2a), facility and purchase intent (H3B), fun attitude and usage (H5a) and attitude and purchase intention (H7). It is concluded, therefore, that the relationship between acceptance and sales strategies, and purchase new products is moderate and that the most efficient strategy in this case is focused on the product.

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When Technologies Compete: The Role of Externalities in Nonlinear Market Response

Cited by 27 publications

References 20 publications

Erratum to: Relationships among time orientation, consumer innovativeness, and innovative behavior: the moderating role of product characteristics

Erratum to: Relationships among time orientation, consumer innovativeness, and innovative behavior: the moderating role of product characteristics

Modeling the Evolution of Markets with Indirect Network Externalities: An Application to Digital Television

O Impacto da Abordagem de Vendas na Aceitação de Produtos com Inovações Tecnológicas

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