Differentiation Across Standards and Adoption Failure in 56k Modems

NET Institute Working Paper No. 03-12

42 Pages Posted: 29 Aug 2004

See all articles by Angelique Augereau

Angelique Augereau

McKinsey & Co.

Shane M. Greenstein

Harvard University - Technology & Operations Management Unit; National Bureau of Economic Research (NBER)

Marc Rysman

Boston University - Department of Economics

Date Written: February 13, 2004

Abstract

56K modems were introduced under two competing incompatible standards. We show the importance of competition between Internet Service Providers in the adoption process. We show that ISP's were less likely to adopt the technology that more competitors adopted. This result is particularly striking given that industry participants expected coordination on one standard or the other. We speculate about the role of ISP differentiation in preventing the market from achieving standardization until a government organization intervened.

JEL Classification: L15, L63, L86

Suggested Citation

Augereau, Angelique and Greenstein, Shane M. and Rysman, Marc, Differentiation Across Standards and Adoption Failure in 56k Modems (February 13, 2004). NET Institute Working Paper No. 03-12. Available at SSRN: https://ssrn.com/abstract=584801 or http://dx.doi.org/10.2139/ssrn.584801

Angelique Augereau

McKinsey & Co.

One First National Plaza
Suite 2900
Chicago, IL 60603
United States

Shane M. Greenstein (Contact Author)

Harvard University - Technology & Operations Management Unit ( email )

Boston, MA 02163
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Marc Rysman

Boston University - Department of Economics ( email )

270 Bay State Road
Boston, MA 02215
United States
617-353-3086 (Phone)
617-353-4449 (Fax)

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