Walled Garden Rivalry: The Creation of Mobile Network Ecosystems

31 Pages Posted: 25 Nov 2011  

Thomas W. Hazlett

Clemson University

David Teece

Institute for Business Innovation

Leonard Waverman

London Business School

Date Written: November 22, 2011

Abstract

Dynamic competitive forces are dramatically altering mobile markets in the U.S. and around the world. Wireless networks, having sunk considerable capital in the creation of phone systems, must not only compete among themselves for subscribers, but also need to form strategic alliances with emerging handset application platforms (HAPs) created by such firms as Research in Motion (Blackberry), Apple (iPhone), and Google (Android). Current developments illustrate two fundamental aspects of innovation. First, that innovations created by one set of investors may generate returns for complementary suppliers, either via coordinated activity (strategic platforms) or competitive rivalry (appropriation). Second, that the efficiency of such ecosystems may be enhanced by market structure innovations that either extend vertical control or delimit it. This runs counter to the prevailing popular and regulatory sentiment that “open” platforms offer categorically superior welfare outcomes than do “closed” systems – aka “walled gardens.”

Suggested Citation

Hazlett, Thomas W. and Teece, David and Waverman, Leonard, Walled Garden Rivalry: The Creation of Mobile Network Ecosystems (November 22, 2011). George Mason Law & Economics Research Paper No. 11-50. Available at SSRN: https://ssrn.com/abstract=1963427 or http://dx.doi.org/10.2139/ssrn.1963427

Thomas W. Hazlett (Contact Author)

Clemson University ( email )

Clemson, SC 29634
United States
8646563430 (Phone)
8646564192 (Fax)

HOME PAGE: http://hazlett.people.clemson.edu/

David J. Teece

Institute for Business Innovation ( email )

F402 Haas School of Business, #1930
Berkeley, CA 94720-1930
United States
(510) 642-4041 (Phone)

Leonard Waverman

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

Paper statistics

Downloads
509
Rank
43,254
Abstract Views
2,694