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

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Author Info
Angelique Augereau
Shane Greenstein
Marc Rysman

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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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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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Handle: RePEc:nbr:nberwo:10334

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Find related papers by JEL classification:
L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Rysman, Marc & Greenstein, Shane, 2005. "Testing for agglomeration and dispersion," Economics Letters, Elsevier, vol. 86(3), pages 405-411, March. [Downloadable!] (restricted)
  2. Marc Rysman, 2004. "Competition Between Networks: A Study of the Market for Yellow Pages," Review of Economic Studies, Blackwell Publishing, vol. 71(2), pages 483-512, 04. [Downloadable!] (restricted)
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    Other versions:
  6. Glenn Ellison & Drew Fudenberg, 2003. "Knife-Edge or Plateau: When do Market Models Tip?," Levine's Bibliography 506439000000000098, UCLA Department of Economics. [Downloadable!]
    Other versions:
  7. David Genesove, 1999. "The Adoption of Offset Presses in the Daily Newspaper Industry in the United States," NBER Working Papers 7076, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Steven Klepper, 2002. "Firm Survival and the Evolution of Oligopoly," RAND Journal of Economics, The RAND Corporation, vol. 33(1), pages 37-61, Spring.
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  11. Gautam Gowrisankaran & Joanna Stavins, 2002. "Network externalities and technology adoption: lessons from electronic payments," Working Papers in Applied Economic Theory 2002-16, Federal Reserve Bank of San Francisco. [Downloadable!]
  12. Tom Downes & Shane Greenstein, 2000. "Universal Access and Local Commercial Internet Markets," Discussion Papers Series, Department of Economics, Tufts University 0017, Department of Economics, Tufts University. [Downloadable!]
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  15. Gautam Gowrisankaran & Daniel A. Ackerberg, 2003. "Quantifying Equilibrium Network Externalities in the ACH Banking Industry," Working Papers 03-06, NET Institute, revised Sep 2003. [Downloadable!]
  16. Gautam Gowrisankaran & Joanna Stavins, 2002. "Network Externalities and Technology Adoption: Lessons from Electronic Payments," NBER Working Papers 8943, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  17. Augereau, Angelique & Greenstein, Shane, 2001. "The need for speed in emerging communications markets: upgrades to advanced technology at Internet Service Providers," International Journal of Industrial Organization, Elsevier, vol. 19(7), pages 1085-1102, July. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Matthew Gentzkow, 2006. "Valuing New Goods in a Model with Complementarities: Online Newspapers," NBER Working Papers 12562, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Ellickson, Paul & Misra, Sanjog, 2006. "Supermarket Pricing Strategies," Working Papers 06-02, Duke University, Department of Economics. [Downloadable!]
  3. Philip A. Haile & Ali Hortacsu & Grigory Kosenok, 0820. "On the Empirical Content of Quantal Response Equilibrium," Cowles Foundation Discussion Papers 1432R, Cowles Foundation, Yale University, revised Jun 0820. [Downloadable!]
    Other versions:
  4. Andrew Sweeting, 2008. "The Strategic Timing Incentives of Commercial Radio Stations: An Empirical Analysis Using Multiple Equilibria," NBER Working Papers 14506, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Irina Suleymanova & Christian Wey, 2008. "Bertrand Competition in Markets with Network Effects and Switching Costs," Discussion Papers of DIW Berlin 796, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  6. Avi Goldfarb & Mo Xiao, 2008. "Who thinks about the competition? Managerial ability and strategic entry in US local telephone markets," Working Papers 08-21, NET Institute, revised Oct 2008. [Downloadable!]
  7. 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. [Downloadable!]
  8. Gautam Gowrisankaran & John Krainer, 2004. "The welfare consequences of ATM surcharges: evidence from a structural entry model," Working Papers in Applied Economic Theory 2005-01, Federal Reserve Bank of San Francisco. [Downloadable!]
    Other versions:
  9. Jackie Krafft & Evens Salies, 2008. "The cost of switching Internet providers in the broadband industry, or why ADSL has diffused faster than other innovative technologies: Evidence from the French case," Post-Print hal-00203512_v1, HAL. [Downloadable!]
  10. Marc Rysman, 2003. "Adoption Delay in a Standards War," Working Papers 03-11, NET Institute, revised Oct 2003. [Downloadable!]
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