An investigation of the word-processing software market war in South Korea: A game-theoretic approach

Authors:
Chuan-Hoo Tan;Xue Yang;Heng Xu
Affiliations:
Department of Information Systems, City University of Hong Kong, Tat Chee Avenue, Kowloon Tong, Hong Kong;Department of Electronic Commerce, School of Management (School of Business), Nanjing University, Hankou Road 22, Nanjing 210093, China;College of Information Sciences and Technology, Pennsylvania State University, 316H IST Building, University Park, PA 16802, United States
Venue:
Information and Management
Year:
2010

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Abstract

We adopted a game-theoretic approach to studying competition in the software market that is dependent on the network effect, i.e., where the success of the software product is mainly affected by the size of its installed base. The primary goals of our research were: to provide insights into competition between a new entrant with a significant presence in foreign countries and a home-grown incumbent, and to offer evidence in support to the theory of competition in the software market. Our analysis of word-processing software competition in South Korea between 1997 and 2003 suggested that there are several factors that caused the new entrant [Microsoft in this case], to overtake the native incumbent as the market leader. The findings are integrated into a discussion of the managerial implications.