Adoption of Standards Under Uncertainty

43 Pages Posted: 5 Aug 2003

Date Written: July 2003

Abstract

The presence of noise in compliance times may have a critical impact on the selection of new technological standards. A technically superior standard is not necessarily viable because an arbitrarily small amount of noise may render coordination on that standard impossible. The criterion for the viability of a standard is that the sum of "support ratios" of all players must be smaller than one, where "support ratio" is defined as the ratio of the firm's per-period cost of supporting the standard to the per-period gross benefit that the firm receives after all players comply with the standard.

Suggested Citation

Ostrovsky, Michael and Schwarz, Michael A., Adoption of Standards Under Uncertainty (July 2003). Available at SSRN: https://ssrn.com/abstract=431700 or http://dx.doi.org/10.2139/ssrn.431700

Michael Ostrovsky

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305
United States
650-724-7280 (Phone)

HOME PAGE: http://faculty-gsb.stanford.edu/ostrovsky/

Michael A. Schwarz (Contact Author)

Microsoft ( email )

2140 Shattuck Ave
Berkeley, CA 94704
United States