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In both cases, firms entrenched their leadership in the industry by establishing their own designs as the successful ones taking advantage of indirect network externalities.
There is a vast literature on this type of emergent mar- kets and the role played by the standards11 when network externalities are present.12 There are different sources of network externalities (Katz and Shapiro, 1985).
First, direct network externalities, in which the utility function of a user increases when there are more people using that product (communication technologies are a typical example).
Second, the so-called indirect network externalities, which have their origin in the variety and quantity of complementary products (the well-known case of software and add-ons for PCs).
The cre- ation of complementary resources (for instance, more availability of films in VHS than in Beta format) and direct network externalities played a crucial role in fav-
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