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Co-opetition and prelaunch in standard-setting for developing technologies

  • Tobias Kretschmer
  • Katrin Muehlfeld

Firms faced with the decision of whether to standardize or not prior to introducing a new network technology face a tradeoff: Compatibility improves the technology’s chances of consumer acceptance, but it also means having to share the resulting profits with other sponsors of the standard. In this paper, we show that even prior to market introduction of a new technology, the timing of decisions is important and that firms have to weigh up the cooperative and competitive elements of pre-market choices. We also show that the option to precommit to a technology before it is fully developed (as has been the case with the Compact Disc) can be profitable for network technologies.

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File URL: http://eprints.lse.ac.uk/19843/
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Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 19843.

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Length: 49 pages
Date of creation: Aug 2006
Handle: RePEc:ehl:lserod:19843
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