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Co-Opetition and Prelaunch in Standard-Setting for Developing Technologies

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Author Info
Tobias Kretschmer
Katrin Muehlfeld

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Abstract

Firms faced with the decision of whether to standardize or not prior to introducing a newnetwork technology face a tradeoff: Compatibility improves the technology's chances ofconsumer acceptance, but it also means having to share the resulting profits with othersponsors of the standard. In this paper, we show that even prior to market introduction of anew technology, the timing of decisions is important and that firms have to weigh up thecooperative and competitive elements of pre-market choices. We also show that the option toprecommit to a technology before it is fully developed (as has been the case with theCompact Disc) can be profitable for network technologies.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0742.

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Date of creation: Aug 2006
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Handle: RePEc:cep:cepdps:dp0742

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Related research
Keywords: Standardization; compact disc; preemption; war-of- attrition;

Find related papers by JEL classification:
L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D

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