In the information technology industry which has high network externalities, it is common for a firm to employ new product pre-announcements to promote their future products. However, false product pre-announcements are strategically anti-competitive. Under the two-stage game model, this paper examines the monopolistic firm¡¦s incentive of employing false pre-announcements when competing with a potential rival and whether those pre-announcements are strategically anti-competitive, provided that the market exhibits network externalities and the compatibility of system products is considered. This paper shows that if there are no potential rivals in the future, if the products have network externalities, and if the compatibility of cross-period products is relatively high, then the monopoly will have an incentive to exaggerate the pre-announcements. If potential rivals enter the market at the second stage, then the greater the monopoly¡¦s technological advantage is, the higher the extent of false pre-announcements will be. However, as long as the network effect is large enough, the monopoly is likely to employ pre-announcements, even if the product has no technological advantage. By excluding potential entrants from entering the market, established monopolistic firms keep their profits. And consumers may have false expectation¡Xa firm could win with an inferior technology¡Xwhich will in turn cause unfair competition. In addition, when the differences of the products are getting larger, a firm¡¦s incentive of employing false pre-announcements will raise. When the two products are totally compatible, the monopoly¡¦s new product pre-announcements are merely affected by the technological advantage. Then the greater the monopoly¡¦s technological advantage is, the higher the extent of false pre-announcements will be.
| Identifer | oai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0811105-145019 |
| Date | 11 August 2005 |
| Creators | Wang, Li-li |
| Contributors | Tru-Gin Lau, Jeun-sheng Lin, Shan-non Chin |
| Publisher | NSYSU |
| Source Sets | NSYSU Electronic Thesis and Dissertation Archive |
| Language | Cholon |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0811105-145019 |
| Rights | campus_withheld, Copyright information available at source archive |
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