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Coordination vs. Differentiation in a Standards War: 56K Modems

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  • Angelique Augereau
  • Shane Greenstein
  • Marc Rysman

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 ISPs 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 form achieving standardization until a government organization intervened.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10334.

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Date of creation: Mar 2004
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Publication status: published as Augereau, Angelique, Shane Greenstein and Marc Rysman. "Coordination versus Differentiation in a Standards War: 56K Modems." Rand Journal of Economics 34,4 (2006): 889-911.
Handle: RePEc:nbr:nberwo:10334

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Cited by:
  1. Igal Hendel & Aviv Nevo & François Ortalo-Magné, 2009. "The Relative Performance of Real Estate Marketing Platforms: MLS versus FSBOMadison.com," American Economic Review, American Economic Association, vol. 99(5), pages 1878-98, December.
  2. Cantillon, Estelle & Yin, Pai-Ling, 2008. "Competition between Exchanges: Lessons from the Battle of the Bund," CEPR Discussion Papers 6923, C.E.P.R. Discussion Papers.
  3. Xiao, Mo & Orazem, Peter, 2006. "Do Entry Conditions Vary over Time? Entry and Competition in the Broadband Market: 1999-2003," Staff General Research Papers 12500, Iowa State University, Department of Economics.
  4. Tor Winston, 2006. "Innovation and Ex Ante Consideration of Licensing Terms in Standard Setting," EAG Discussions Papers 200603, Department of Justice, Antitrust Division.

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