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Evolving Technologies and Standards Regulation

18 Pages Posted: 15 Apr 2008  

Luis M. B. Cabral

New York University (NYU) - Leonard N. Stern School of Business - Department of Economics; Centre for Economic Policy Research (CEPR)

David J. Salant

Toulouse School of Economics; Columbia University - Columbia Institute for Tele Information; Center for Research in Wireless Communications

Multiple version iconThere are 2 versions of this paper

Date Written: April 2008

Abstract

Spectrum regulation necessarily involves some regulation of the technology that licensees can use. One commonly stated assertion is that a mandated single standard, the solution followed by the EU for 2G wireless, is a successful model for spectrum regulation. We argue that a single standard leads to a free riding problem, and thus to a significant decrease in marginal incentives for R&D investment. In this context, keeping two separate standards may be a necessary evil to sustain a high level of R&D expenditures. We also provide conditions such that a non-standardization equilibrium is better for consumers and for society as a whole.

Suggested Citation

Cabral, Luis M. B. and Salant, David J., Evolving Technologies and Standards Regulation (April 2008). Available at SSRN: https://ssrn.com/abstract=1120862 or http://dx.doi.org/10.2139/ssrn.1120862

Luis M. B. Cabral (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States
212-998-0858 (Phone)
212-998-4218 (Fax)

HOME PAGE: http://www.stern.nyu.edu/~lcabral

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

David J. Salant

Toulouse School of Economics ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

HOME PAGE: http://www.tse-fr.eu

Columbia University - Columbia Institute for Tele Information ( email )

3022 Broadway
New York, NY 10027
United States
+1-917-415-0451 (Phone)

Center for Research in Wireless Communications ( email )

101 Sikes Ave
Clemson, SC 29634

HOME PAGE: http://www.clemson.edu/crwc/people/faculty/Salant.htm

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