Winning the Hardware-Software Game
Using Game Theory to Optimize the Pace of New Technology Adoption
Innovators of new technology systems requiring users to combine both hardware and software components often face delays in adoption of their new systems. Users will not buy the hardware until enough software or content is available, while at the same time software providers will not provide content until enough users have adopted the new system. Winning the Hardware-Software Game examines the dynamics of this adoption process and provides methods for optimizing the pace of adoption of new technology systems.
A chicken-and-egg problem occurs when systems innovators introduce hardware components of new hardware-software systems into the marketplace, but adoption is held-up, or delayed, by users who refuse to adopt the new system until there is enough content available to go with the hardware, while software providers refuse to supply content until enough users have adopted the new system and can access the content. The author refers to the dynamics during the adoption process of new technology systems among hardware suppliers, software suppliers, and users as the hardware-software game.
This book offers a systematic analysis of the hold-up problem in adoption of next generation hardware-software systems. The analysis combines aspects of sociology, business strategy, and economics to examine the underlying dynamics of the adoption process, and it offers methods by which systems innovators can provide incentives for content providers and systems users to adopt next generation systems sooner than they might otherwise be led to do.