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Differentiation Across Standards and Adoption Failure in 56K Modems

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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 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.

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  • Marc Rysman, 2003. "Differentiation Across Standards and Adoption Failure in 56K Modems," Working Papers 03-12, NET Institute, revised Dec 2003.
    • Handle: RePEc:net:wpaper:0312
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    More about this item

    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
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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