Technological Standards with Local Externalities and Decentralized Behavior
Posted: 31 Dec 1998
We model a situation in which agents must choose between two technologies that operate under local, positive network externalities. We find that decentralized behavior can lead to the emergence of a technical standard but can also result in a variety of other equilibria. Policy to eliminate non-standardized equilibria can be effected, but in some cases it may be very costly.
JEL Classification: C7, D2, D8
Suggested Citation: Suggested Citation