Bandwagon Effects in High Technology Industries

Bandwagon Effects in High Technology Industries

by Jeffrey H. Rohlfs, Hal Varian
     
 

View All Available Formats & Editions

Economists use the term "bandwagon effect" to describe the benefit a consumer enjoys as a result of others' using the same product or service. The history of videocassettes offers a striking example of the power of bandwagon effects. Originally there were two technical standards for videocassettes in the United States: Beta and VHS. Beta was widely regarded to have…  See more details below

Overview

Economists use the term "bandwagon effect" to describe the benefit a consumer enjoys as a result of others' using the same product or service. The history of videocassettes offers a striking example of the power of bandwagon effects. Originally there were two technical standards for videocassettes in the United States: Beta and VHS. Beta was widely regarded to have better picture quality, but VHS could record longer television programs. Eventually the selection of Beta cassettes shrank to zero, leaving consumers no choice but to get on the VHS bandwagon. The most successful bandwagon, apart from telephone service, is the Internet.

In this book Jeffrey Rohlfs shows how the dynamics of bandwagons differ from those of conventional products and services. They are difficult to get started and often fail before getting under way. A classic example of a marketing failure is the Picturephone, introduced by the Bell System in the early 1970s. Rohlfs describes the fierce battles waged by competitors when new services are introduced, as well as cases of early agreement on a single technical standard, as with CDs and CD players. He also discusses the debate among economists and policy analysts over the advantages and disadvantages of having governments set technical standards. The case studies include fax machines, telephones, CD players, VCRs, personal computers, television, and the Internet.

Read More

Product Details

ISBN-13:
9780262182171
Publisher:
MIT Press
Publication date:
10/01/2001
Pages:
250
Product dimensions:
6.00(w) x 9.00(h) x 1.00(d)

What People are saying about this

From the Publisher

"This book is a gem; Rohlf's writing is straightforward and very readable. The book is timely because its subject matter is at the heart of e-commerce."--Edward E. Zajac, Department of Economics, University of
Arizona

The MIT Press

"A witty and accessible introduction to bandwagon and network effects by one of the true pioneers in the field. The book surveys theory and practice to draw out practical lessons of interest to business and government decision makers alike."--Michael Katz, Edward J. and Mollie Arnold Professor of Business
Administration, Haas School of Business, University of California,
Berkeley

The MIT Press

"Jeffrey Rohlfs was a major early contributor to the theory of network effects, and here he combines sensible theory with thoughtful case studies. Everyone interested in innovation and competition will find value in this book."--Joseph
Farrell, Department of Economics, University of California, Berkeley, former Deputy
Assistant Attorney General, United States Department of Justice

The MIT Press

Read More

Meet the Author

Jeffrey H. Rohlfs is a Principal at Strategic Policy Research in Bethesda,
Maryland.

Customer Reviews

Average Review:

Write a Review

and post it to your social network

     

Most Helpful Customer Reviews

See all customer reviews >