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Role of Complementarities in Technology Adoption: The Case of DVD Players

Pinar Karaca-Mandic, RAND

Abstract

This paper estimates complementarities between DVD player adoption and availability of content on DVD. Model is estimated using household level panel data on adoption decisions, and panel data on the availability of movies for rental on DVD at different local regions as well as time series data on the number of movies released on DVD nationally. Estimated complementarities are statistically and economically significant, and suggest that DVD player manufacturers could achieve profit gains from subsidizing DVD content providers to release more movies on DVD. (JEL D12, D62, L11, L82, O33) Keywords: indirect network effects, complementarity, new technology, diffusion

Suggested Citation

Pinar Karaca-Mandic. 2007. "Role of Complementarities in Technology Adoption: The Case of DVD Players" The Selected Works of Pinar Karaca-Mandic
Available at: http://works.bepress.com/pinar_karaca_mandic/14