Co-opetition in Standard-Setting: The Case of the Compact Disc

NET Institute Working Paper No. 04-14

32 Pages Posted: 15 Nov 2004  

Tobias Kretschmer

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management); Centre for Economic Policy Research (CEPR)

Katrin Muehlfeld

Utrecht University - Utrecht University School of Economics; University of Trier - Faculty of Management

Date Written: October 2004

Abstract

The success of the CD has (partly) been attributed to the ability of Sony, Philips and Matsushita to cooperate in the run-up to the DAD conference in 1981, where the technological standard was set. We model the situation leading up to the conference in a simple game with technological progress and the possibility of prelaunching a technology. We identify players' tradeoffs between prelaunching (which ends technological progress) and continued development (which involves the risk of being pre-empted). Contrasting outcomes with complete and incomplete information, we find that there appeared to be considerable uncertainty about rivals' technological progress.

Suggested Citation

Kretschmer, Tobias and Muehlfeld, Katrin, Co-opetition in Standard-Setting: The Case of the Compact Disc (October 2004). NET Institute Working Paper No. 04-14. Available at SSRN: https://ssrn.com/abstract=618484 or http://dx.doi.org/10.2139/ssrn.618484

Tobias Kretschmer

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, 80539
Germany

Centre for Economic Policy Research (CEPR) ( email )

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Katrin Muehlfeld (Contact Author)

Utrecht University - Utrecht University School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, +31 30 253 7373 3584 EC
Netherlands

University of Trier - Faculty of Management ( email )

Germany

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