Inefficient Standard Adoption: Inertia and Momentum Revisited
29 Pages Posted: 26 Apr 2003
Date Written: October 7, 2004
Abstract
This paper examines the possibility that consumers will adopt an inefficient standard. When there are successive generations of consumers, the current generation will not consider the costs and benefits to past and future generations of adopting a new standard. If a standard is proprietary, the incentives of a firm to induce adoption of the standard generally do not match the social incentives. The divergence is caused by the firm's imperfect ability to appropriate the future surplus generated by the standard.
JEL Classification: L0, L1
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Coordination and Lock-In: Competition with Switching Costs and Network Effects
By Joseph Farrell and Paul Klemperer
-
Coordination and Lock-In: Competition with Switching Costs and Network Effects
By Joseph Farrell and Paul Klemperer
-
Do Firms' Product Lines Include Too Many Varieties?
By Paul Klemperer and Jorge Padilla
-
Regulating Endogenous Customer Switching Costs
By Joshua S. Gans and Stephen P. King
-
Compatibility Incentives of a Large Network Facing Multiple Rivals
By David A. Malueg and Marius Schwartz
-
Numbers to the People: Regulation, Ownership and Local Number Portability
By Joshua S. Gans, Stephen P. King, ...