IDEAS home Printed from https://ideas.repec.org/p/cri/cespri/wp146.html
   My bibliography  Save this paper

Rapid Technical Change and the Speed of Lock-in: Standard Battles in the Local Area Network Industry in the 1990s

Author

Abstract

The rise of Fast Ethernet as the dominant standard for high speed connection in the Local Area Network industry is chosen to analyse the relevance of increasing returns and network externalities in determining the speed of standard diffusion. Although it was not the first standard to emerge, Fast Ethernet was able to catch up an out-compete existing alternatives due its ability to target different user needs and penetrate new market niches. In the presence of rapid technological change, even though a technology enjoys a head start over competing alternatives, achieving lock-in may be more difficult than the theory on increasing returns and network externalities generally predicts.

Suggested Citation

  • Roberto Fontana, 2003. "Rapid Technical Change and the Speed of Lock-in: Standard Battles in the Local Area Network Industry in the 1990s," KITeS Working Papers 146, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2003.
    • Handle: RePEc:cri:cespri:wp146
    as

    Download full text from publisher

    File URL: ftp://ftp.unibocconi.it/pub/RePEc/cri/papers/WP146Fontana.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    2. Postrel, Steven R, 1990. "Competing Networks and Proprietary Standards: The Case of Quadraphonic Sound," Journal of Industrial Economics, Wiley Blackwell, vol. 39(2), pages 169-185, December.
    3. Cusumano, Michael A. & Mylonadis, Yiorgos & Rosenbloom, Richard S., 1992. "Strategic Maneuvering and Mass-Market Dynamics: The Triumph of VHS over Beta," Business History Review, Cambridge University Press, vol. 66(1), pages 51-94, April.
    4. 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.
    5. Islas, Jorge, 1997. "Getting round the lock-in in electricity generating systems: the example of the gas turbine," Research Policy, Elsevier, vol. 26(1), pages 49-66, March.
    6. Joseph Farrell & Garth Saloner, 1985. "Installed Base and Compatibility With Implications for Product Preannouncements," Working papers 385, Massachusetts Institute of Technology (MIT), Department of Economics.
    7. Cowan, Robin, 1990. "Nuclear Power Reactors: A Study in Technological Lock-in," The Journal of Economic History, Cambridge University Press, vol. 50(3), pages 541-567, September.
    8. Foray, Dominique & Grubler, Arnulf, 1990. "Morphological analysis, diffusion and lockout of technologies: Ferrous casting in France and the FRG," Research Policy, Elsevier, vol. 19(6), pages 535-550, December.
    9. Stanley M. Besen & Joseph Farrell, 1994. "Choosing How to Compete: Strategies and Tactics in Standardization," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 117-131, Spring.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marechal, Kevin, 2007. "The economics of climate change and the change of climate in economics," Energy Policy, Elsevier, vol. 35(10), pages 5181-5194, October.
    2. van Wessel, R.M., 2008. "Realizing business benefits from company IT standardization : Case study research into the organizational value of IT standards, towards a company IT standardization management framework," Other publications TiSEM 4bdde091-4f3f-4be1-84aa-9, Tilburg University, School of Economics and Management.
    3. Deishin Lee & Haim Mendelson, 2007. "Adoption of Information Technology Under Network Effects," Information Systems Research, INFORMS, vol. 18(4), pages 395-413, December.
    4. van de Kaa, Geerten & de Vries, Henk J., 2015. "Factors for winning format battles: A comparative case study," Technological Forecasting and Social Change, Elsevier, vol. 91(C), pages 222-235.
    5. Jaffe, Adam B. & Newell, Richard G. & Stavins, Robert N., 2003. "Chapter 11 Technological change and the environment," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 11, pages 461-516, Elsevier.
    6. Timothy Simcoe & Jeremy Watson, 2019. "Forking, Fragmentation, and Splintering," Strategy Science, INFORMS, vol. 4(4), pages 283-297, December.
    7. Wei Jin & ZhongXiang Zhang, 2015. "Levelling the Playing Field: On the Missing Role of Network Externality in Designing Renewable Energy Technology Deployment Policies," Working Papers 2015.76, Fondazione Eni Enrico Mattei.
    8. Heli Koski & Tobias Kretschmer, 2004. "Survey on Competing in Network Industries: Firm Strategies, Market Outcomes, and Policy Implications," Journal of Industry, Competition and Trade, Springer, vol. 4(1), pages 5-31, March.
    9. Kerstan, Sven & Kretschmer, Tobias & Muehlfeld, Katrin, 2012. "The dynamics of pre-market standardization," Information Economics and Policy, Elsevier, vol. 24(2), pages 105-119.
    10. A Kimms, 2003. "Costing communication standards in information systems using a minimum cut approach," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 54(4), pages 426-431, April.
    11. Kretschmer, Tobias & Muehlfeld, Katrin, 2006. "Co-opetition and prelaunch in standard-setting for developing technologies," LSE Research Online Documents on Economics 19843, London School of Economics and Political Science, LSE Library.
    12. Suleymanova Irina & Wey Christian, 2011. "Bertrand Competition in Markets with Network Effects and Switching Costs," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-58, September.
    13. Scott, Peter, 2001. "Path Dependence and Britain's "Coal Wagon Problem"," Explorations in Economic History, Elsevier, vol. 38(3), pages 366-385, July.
    14. Narayanan, V.K. & Chen, Tianxu, 2012. "Research on technology standards: Accomplishment and challenges," Research Policy, Elsevier, vol. 41(8), pages 1375-1406.
    15. Roman Beck & Daniel Beimborn & Tim Weitzel & Wolfgang König, 2008. "Network effects as drivers of individual technology adoption: Analyzing adoption and diffusion of mobile communication services," Information Systems Frontiers, Springer, vol. 10(4), pages 415-429, September.
    16. Stavins, Robert & Jaffe, Adam & Newell, Richard, 2000. "Technological Change and the Environment," Working Paper Series rwp00-002, Harvard University, John F. Kennedy School of Government.
    17. Kari Kemppainen, 2004. "Competition and regulation in European retail payment systems," Microeconomics 0404008, University Library of Munich, Germany.
    18. Yi-Nung Yang, 1996. "Network Effects, Pricing Strategies, and Optimal Upgrade Time in Software Provision," Industrial Organization 9602001, University Library of Munich, Germany.
    19. Tobias Kretschmer & Katrin Muehlfeld, 2004. "Co-opetition in Standard-Setting: The Case of the Compact Disc," Working Papers 04-14, NET Institute, revised Oct 2004.
    20. Murmann, Johann Peter & Frenken, Koen, 2006. "Toward a systematic framework for research on dominant designs, technological innovations, and industrial change," Research Policy, Elsevier, vol. 35(7), pages 925-952, September.

    More about this item

    Keywords

    Technical change; Lock-in; LAN equipment;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cri:cespri:wp146. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Valerio Sterzi (email available below). General contact details of provider: http://www.kites.unibocconi.it/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.