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Article: Beyond the more the merrier: The variety effect and consumer heterogeneity in system markets

TitleBeyond the more the merrier: The variety effect and consumer heterogeneity in system markets
Authors
KeywordsIndirect network effect
Product variety
Superstars
System markets
Variety effect
Video games
Issue Date2016
Citation
International Journal of Research in Marketing, 2016, v. 33, n. 2, p. 261-275 How to Cite?
AbstractResearch in indirect network effects has simplistically treated complementary product variety as the total number of complementary products (e.g., game titles in video game markets). This assumption of equi-differentiation ignores differences across genres or product categories. Furthermore, since consumers with differential preferences for variety enter the market at different stages, consumer heterogeneity in preference for variety in complementary products may evolve as the market develops. We propose a model that recognizes these previously ignored, but important, demand characteristics, and empirically investigate the effects of breadth and depth of software variety on consumer hardware adoption in the fifth-generation video game market. We find that early adopters seek variety across a wide spectrum of game genres, and that late adopters are interested only in action-oriented games and have no interest in strategy-oriented games unless they are so-called "superstars." Our findings imply that effective variety planning should be built along both dimensions, instead of simply assuming that more is better. Our policy simulations demonstrate that variety planning is as critical as entry timing to the success of platform companies in system competition, and is one of the reasons for PlayStation's winning the battle against Nintendo64. In addition, the boosting effect of a new title on hardware sales perishes quickly, so it is important to have a cascade strategy to guarantee a continuous supply of complementary software.
Persistent Identifierhttp://hdl.handle.net/10722/318598
ISSN
2023 Impact Factor: 5.9
2023 SCImago Journal Rankings: 3.352
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorSun, Li-
dc.contributor.authorRajiv, Surendra-
dc.contributor.authorChu, Junhong-
dc.date.accessioned2022-10-11T12:24:07Z-
dc.date.available2022-10-11T12:24:07Z-
dc.date.issued2016-
dc.identifier.citationInternational Journal of Research in Marketing, 2016, v. 33, n. 2, p. 261-275-
dc.identifier.issn0167-8116-
dc.identifier.urihttp://hdl.handle.net/10722/318598-
dc.description.abstractResearch in indirect network effects has simplistically treated complementary product variety as the total number of complementary products (e.g., game titles in video game markets). This assumption of equi-differentiation ignores differences across genres or product categories. Furthermore, since consumers with differential preferences for variety enter the market at different stages, consumer heterogeneity in preference for variety in complementary products may evolve as the market develops. We propose a model that recognizes these previously ignored, but important, demand characteristics, and empirically investigate the effects of breadth and depth of software variety on consumer hardware adoption in the fifth-generation video game market. We find that early adopters seek variety across a wide spectrum of game genres, and that late adopters are interested only in action-oriented games and have no interest in strategy-oriented games unless they are so-called "superstars." Our findings imply that effective variety planning should be built along both dimensions, instead of simply assuming that more is better. Our policy simulations demonstrate that variety planning is as critical as entry timing to the success of platform companies in system competition, and is one of the reasons for PlayStation's winning the battle against Nintendo64. In addition, the boosting effect of a new title on hardware sales perishes quickly, so it is important to have a cascade strategy to guarantee a continuous supply of complementary software.-
dc.languageeng-
dc.relation.ispartofInternational Journal of Research in Marketing-
dc.subjectIndirect network effect-
dc.subjectProduct variety-
dc.subjectSuperstars-
dc.subjectSystem markets-
dc.subjectVariety effect-
dc.subjectVideo games-
dc.titleBeyond the more the merrier: The variety effect and consumer heterogeneity in system markets-
dc.typeArticle-
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1016/j.ijresmar.2015.05.010-
dc.identifier.scopuseid_2-s2.0-84936816967-
dc.identifier.volume33-
dc.identifier.issue2-
dc.identifier.spage261-
dc.identifier.epage275-
dc.identifier.isiWOS:000379632400003-

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