菀矣杏.PDFVIP

The dynamics of technological adoption in hardware/software systems: the case of compact disc players Neil Gandal,* Michael Kende,** and Rafael Rob*** In this paper we examine the diusion of a hardware/software system. For such systems there is interdependence between the hardware-adoption decisions of consumers and the supply decisions of software manufacturers. Hence there can be bottlenecks to the diusion of the system. We consider the CD-industry and estimate the (direct) elasticity of adoption with respect to CD-player prices and (the cross) elasticity with respect to the variety of CD-titles. Our results show that the cross elasticity is signicant. Our model can be used to quantify the eect of various policies aimed at speeding up the diusion of a system. *Department of Public Policy, Tel Aviv University, Tel Aviv 69978, Israel, and CEPR, email: gandal@p ost.tau.ac.il **Federal Communications Commission, 1919 M Street NW, Washington, DC 20554, USA email: mkende@fcc.gov ***Department of Economics, University of Pennsylvania, 3718 Lo cust Walk, Philadelphia, PA, 19104, USA email:rrob@econ.sas.up enn.edu We are esp ecially grateful to the Editor Glenn Ellison for many insightful comments and suggestions that signicantly improved the manuscript. We also thank two anonymous referees, Pedro Barros, Ed Glaeser, Gordon Hanson, Ariel Pakes, Lars-Hendrik Roller, John Rust and seminar participants at several universities for helpful comments. We are grateful to INSEAD for a research grant and to Julia Stephan for exp ert research assistance. 1 1 Intro duction 1.1 Ob jective of Pap er The last two decades have witnessed a great proliferation of high-tech consumer electronic pro ducts. The successful diusion of these pro ducts is often contingent up