Firms often announce new products well in advance of their actual market availability. The incentives for pre-announcements are conceived to be stronger in markets with network effects because they can be used to induce the delay of consumers purchases and forestall the build-up of rival products installed bases. However, such announcements often are not fulfilled, raising antitrust concerns. We analyze the effects of product pre-announcements in the presence of network effects when firms strategically make false announcements. We also discuss their implications for consumer welfare.
Bibliographical noteFunding Information:
＊ Jay Pil Choi acknowledges the financial support of Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2016S1A5A2A01022389), This research is supported by a Korea University grant (K1707611).
- Network effects
- Product pre-announcements
- Reputation JEL Classification Codes: L1
- Technology adoption
ASJC Scopus subject areas
- General Business,Management and Accounting
- Economics and Econometrics