WHY QUALITY MAY NOT ALWAYS WIN: THE IMPACT OF PRODUCT GENERATION LIFE-CYCLES ON QUALITY AND NETWORK EFFECTS IN HIGH-TECH MARKETS

摘要

Many high-tech industries are characterized by positive indirect network effects associated with the hardware/software relationship - consumers receive greater benefit from hardware with a larger selection of software, and software firms find it more profitable to provide for hardware with a larger installed base of consumers. Recent marketing literature has witnessed a major debate about the critical drivers of success - quality versus network effect, as well as efficiency in these types of markets (Ratchford 2009; Reibstein 2009; Rossi 2009; Tellis, Yin, and Niraj 2009a, 2009b). Tellis, Yin, and Niraj (2009a) demonstrate that both the quality effect and network effect are significant factors determining market shares in these markets, but that quality effect is more important than the network effect, and that such markets are efficient.