Technological competition, strategies of the firms and the choice of the first users: the case of road guidance technologies
Based on an in-depth study of two different road guidance technologies, both under increasing returns to adoption, this paper is an attempt to elucidate the strategic game played by the producers and the first users before the introduction of the technologies onto the market. It shows that it is possible to endogenize the decisions made by the first users (who are chosen by the supplier) as much as those of the suppliers when they choose the first users. When identifying first users, firms evaluate their capacity to influence other potential adopters, a capacity which depends on their position in the social networks to which they belong. In order to enrol the first users, the producers of a technology develop various strategies, including standardization in voluntary standardization committees, pre-announcement, scientific legitimizing and even technological transformation of the product itself. Indeed, the first users who seem strategically vital by the sponsor of the first system are not necessarily the same as those targeted by the sponsors of the second technology. Thus, the degree of substitutability itself appears as an endogenous variable. This analysis provides a new basis for understanding technological competition and completes economic modelling of the competition.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
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.:
- Farrell, Joseph & Saloner, Garth, 1986. "Installed Base and Compatibility: Innovation, Product Preannouncements, and Predation," American Economic Review, American Economic Association, vol. 76(5), pages 940-955, December.
- von Hippel, Eric, 1976. "The dominant role of users in the scientific instrument innovation process," Research Policy, Elsevier, vol. 5(3), pages 212-239, July.
- Berg, Sanford V, 1989. "The Production of Compatibility: Technical Standards as Collective Goods," Kyklos, Wiley Blackwell, vol. 42(3), pages 361-383.
- Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-440, June.
- Katz, Michael L & Shapiro, Carl, 1986. "Technology Adoption in the Presence of Network Externalities," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 822-841, August.
- Cowan, Robin, 1990.
"Nuclear Power Reactors: A Study in Technological Lock-in,"
The Journal of Economic History,
Cambridge University Press, vol. 50(03), pages 541-567, September.
- Cowan, Robin, 1988. "Nuclear Power Reactors: A Study In Technological Lock-In," Working Papers 88-33, C.V. Starr Center for Applied Economics, New York University.
- Glen L. Urban & Eric von Hippel, 1988. "Lead User Analyses for the Development of New Industrial Products," Management Science, INFORMS, vol. 34(5), pages 569-582, May.
- Brian Arthur, W. & Ermoliev, Yu. M. & Kaniovski, Yu. M., 1987. "Path-dependent processes and the emergence of macro-structure," European Journal of Operational Research, Elsevier, vol. 30(3), pages 294-303, June.
- repec:hal:journl:hal-00424311 is not listed on IDEAS
- Berg, Sanford V., 1988. "Duopoly compatibility standards with partial cooperation and standards leadership," Information Economics and Policy, Elsevier, vol. 3(1), pages 35-53. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:24:y:1995:i:3:p:441-458. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.