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Winning the hardware-software game: using game theory to optimize the pace of new technology adoption
Author
Publisher
Prentice Hall
Publication Date
c2009
Language
English
Description
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Table of Contents
From the Book
Preface
Acknowledgments
About the Author
Chapter 0. Introduction
0.1. Game Theory and the Chicken-and-Egg Problem
0.2. Organization of the Book
Chapter 1. Network Effects
1.1. Definition and Sources of Network Effects
1.2. Switching Costs
1.3. Compatibility
1.4. Network Effects and the Hardware-Software Game
Chapter 2. Technology Adoption Lifecycles
2.1. Production and Consumption Lifecycles
2.2. Lifecycles of Network Effects
2.3. Technology Replacement Lifecycles
2.4. Critical Mass
2.5. Technology Adoption Lifecycles and the Hardware-Software Game
Chapter 3. Technology System Users
3.1. User Demand for New Technology Hardware
3.1.1. Installed Base
3.1.2. The Stock of Content Available
3.1.3. Price of New Technology Hardware and Content
3.1.4. Numerical Example of Demand for New Technology Hardware
3.2. User Demand for New Technology Content
3.2.1. Installed Base
3.2.2. The Stock of Content Available
3.2.3. Numerical Example of Demand for New Technology Content
3.3. Summary of User Demand for New Systems Hardware and Content
Chapter 4. Technology System Suppliers
4.1. Provision of Hardware
4.2. Provision of Content
Chapter 5. The Hardware-Software Game
5.1. Introduction to Game Theory
5.2. Definition of the Hardware-Software Game
5.3. Assumptions about Market Dynamics
5.3.1. Technology Value and Market Size
5.3.2. Sensitivity to Price
5.3.3. Strength of Network Effects for Hardware
5.3.4. Strength of Network Effects for Software
5.3.5. Degree of Content Complementarity
5.4. Overview of the Game
5.5. Simulation Categories and Scenarios
5.6. Profit Frontiers by Category of Network Effects
5.6.1. Hardware Manufacturers' Profits
5.6.2. Software Providers' Profits
5.7. Impact of Speed of Adoption on Profitability
5.8. Sensitivity of Profits to Changes in Market Drivers
5.9. General Implications
5.9.1. Overall Profit Potential
5.9.2. Profits and Market Environment
5.9.3. Timing of Profits
5.9.4. Network Effects Dynamics
5.9.5. Value Extraction
Chapter 6. Addressing the Chicken-and-Egg Problem
6.1. Statement of the Problem
6.2. General Responses to the Chicken-and-Egg Problem
6.2.1. Engineer New Systems for Maximum Likelihood of Adoption
6.2.2. Create Expectations of New System Adoption
6.2.3. Establish a Good Reputation
6.2.4. Decrease Relative Value of Old Systems
6.2.5. Increase Relative Value of New Systems
6.2.6. Switching Costs
6.2.7. Summary of General Responses
6.3. Scenario-Specific Responses to the Chicken-and-Egg Problem
6.3.1. Market Size
6.3.2. User Sensitivity to Price
6.3.3. Direct Network Effects
6.3.4. Indirect Network Effects
6.3.5. Summary of Scenario-Specific Responses
Chapter 7. Summary, Applications, and Extensions
7.1. Key Points from the Analysis
7.2. Tools for Applying the Model
7.2.1. Assessing Relative Sizes and Sources of New System Values
7.2.2. Better Understanding User Demand for New System Hardware
7.2.3. Better Understanding Optimal Allocations of Content
7.3. Extensions of the Analysis
7.3.1. Estimates of Network Effect Elasticities
7.3.2. Network System Routes to Market
Appendix A. Model of the Hardware-Software Game
A.1. Definition of Key Terms
A.1.1. Technology User Dynamics
A.1.2. Technology Content Dynamics
A.2. User Demand Functions
A.2.1. User Demand for New Technology Hardware
A.2.2. User Demand for New Technology Content
A.3. Provision of Hardware
A.4. Provision of Content
A.5. Three-Period Model
A.5.1. Derivation of the Hardware Manufacturer's Problem
A.5.2. Derivation of the Content Provider's Problem
A.5.3. Equilibrium
Appendix B. Further Information
B.1. Adoption of VHS versus Betamax
B.2. Adoption of Next-Generation DVD
B.3. Adoption of HDTV
B.4. Adoption of Consumer Durables
B.5. Networks and Network Effects
B.6. Lock-in and Path Dependence
B.7. Standardization and Compatibility
B.8. Innovation and Adoption of New Technologies
B.9. Product Lifecycles
B.10. Critical Mass
B.11. First-Mover Advantages in Adoption of New Technologies
B.12. Social Networks and Technology Adoption
References
Index
Author Notes
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ISBN
9780137002825
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