Membership, Governance, and Lobbying in Standard-Setting Organizations

32 Pages Posted: 19 Dec 2018 Last revised: 22 Feb 2019

See all articles by Maria Jose Larrain

Maria Jose Larrain

Tilburg Law and Economics Center (TILEC)

Jens Prufer

Tilburg University - CentER; Tilburg University - Department of Economics; Tilburg University - Law and Economics Center (TILEC)

Date Written: December 19, 2018

Abstract

Standard-setting organizations (SSOs) are collectively self-governed industry associations, formed by innovators and implementers. They are the main organizational form to agree on and manage technical standards, which have significant positive welfare effects. SSO self-governance avoids monopolization and increases a standard's acceptance but also introduces specific issues. Constructing a model, we study the incentives of heterogeneous innovators and implementers to join a SSO, which is endogenously formed. We also studythe effect of SSO governance on membership incentives and on members' lobbying efforts to get their technologies included in the standard. We show that, depending on parameter realizations, one of four equilibrium types arises uniquely. The results can reconcile existing evidence, especially that many SSO member firms are small. We create intuition regarding firms' trade-off, which depends on the beliefs of active members to get their technologies included in the standard and the intensity of knowledge spillovers.

Keywords: D71, D72, L15, O31

JEL Classification: Standard-setting organizations, standardization, associations, membership, governance, lobbying.

Suggested Citation

Larrain, Maria Jose and Prufer, Jens, Membership, Governance, and Lobbying in Standard-Setting Organizations (December 19, 2018). TILEC Discussion Paper No. 2018-042. Available at SSRN: https://ssrn.com/abstract=3303724 or http://dx.doi.org/10.2139/ssrn.3303724

Maria Jose Larrain (Contact Author)

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Jens Prufer

Tilburg University - CentER ( email )

P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Tilburg University - Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

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