Abstract
This paper examines three strategies for R&D investments in oligopoly markets with network externalities. The Cell project of the Sony-Toshiba-IBM R&D joint venture motivates our analysis and presentation. In addition to the particular characteristics that apply to the Cell project, we develop formal economic explanations for observed R&D investment strategies in markets with network externalities. Our analytical model suggests that the degree of product compatibility, initial market shares, and the intensity of the product-market competition are instrumental to the R&D strategy in these markets. The paper ties together the literature on information technologies, strategy, and economics, and derives optimal patterns of strategic behavior in the R&D (pre-production) stage in oligopoly markets with network externalities.
Original language | English |
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State | Published - 2006 |
Event | 14th European Conference on Information Systems, ECIS 2006 - Goteborg, Sweden Duration: 12 Jun 2006 → 14 Jun 2006 |
Conference
Conference | 14th European Conference on Information Systems, ECIS 2006 |
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Country/Territory | Sweden |
City | Goteborg |
Period | 12/06/06 → 14/06/06 |
Keywords
- Compatibility
- Cooperation in r&d
- Network externalities
- Product innovation