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Standardization In The Wireless Internet Market: Lessons From Japan And Korea

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  • Jeong‐Yoo Kim
  • Taehun Jung
  • Nae‐Chan Lee

Abstract

The wireless Internet market has been growing rapidly since NTT DoCoMo first introduced the service in 1999. This paper provides a framework within which the wireless Internet market can be analysed so as to draw valuable policy implications. We show that if platforms are standardized: (i) social welfare is increased with the rational expectation of larger installed bases; (ii) the neutrality of a revenue-sharing ratio that is valid for non‐standardized network platforms is affected; and (iii) the collusive interconnection charge is lower than the social optimum insofar as the population mass of content providers is less dense than that of Internet users.

Suggested Citation

  • Jeong‐Yoo Kim & Taehun Jung & Nae‐Chan Lee, 2010. "Standardization In The Wireless Internet Market: Lessons From Japan And Korea," Pacific Economic Review, Wiley Blackwell, vol. 15(5), pages 620-636, December.
  • Handle: RePEc:bla:pacecr:v:15:y:2010:i:5:p:620-636
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    File URL: http://hdl.handle.net/10.1111/j.1468-0106.2010.00519.x
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    References listed on IDEAS

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    1. Jean-Jacques Laffont & Patrick Rey & Jean Tirole, 1998. "Network Competition: I. Overview and Nondiscriminatory Pricing," RAND Journal of Economics, The RAND Corporation, vol. 29(1), pages 1-37, Spring.
    2. Jean-Charles Rochet & Jean Tirole, 2014. "Platform Competition in Two-Sided Markets," CPI Journal, Competition Policy International, vol. 10.
    3. Imho Kang & Jeong-yoo Kim, 2005. "Standardization in electronic money," International Economic Journal, Taylor & Francis Journals, vol. 19(3), pages 447-459.
    4. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-440, June.
    5. Laffont, Jean-Jacques & Marcus, Scott & Rey, Patrick & Tirole, Jean, 2003. " Internet Interconnection and the Off-Net-Cost Pricing Principle," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 370-390, Summer.
    6. Gans Joshua S & King Stephen P, 2003. "The Neutrality of Interchange Fees in Payment Systems," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-18, January.
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    Cited by:

    1. Jang C. Jin & E. Kwan Choi, 2014. "Citations of Most Often Cited Economists: Do Scholarly Books Matter More than Quality Journals?," Pacific Economic Review, Wiley Blackwell, vol. 19(1), pages 8-24, February.

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