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Evolving Technologies and Standards Regulation

Author Info

Listed author(s):
  • Luis Cabral
  • David Salant

Abstract

The EU mandated a single standard for second generation wireless telecommunications, whereas the US allowed several incompatible standards to battle for market share. Motivated by this example, we argue that a single standard leads to a free riding problem, and thus to a significant decrease in marginal incentives for R&D investment. In this context, keeping two separate standards may be a necessary evil to sustain a high level of R&D expenditures. We also provide conditions such that a non-standardization equilibrium is better for consumers and for society as a whole.

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File URL: http://w4.stern.nyu.edu/emplibrary/Cabral%20evolving%20tech%5B1%5D.pdf
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Paper provided by New York University, Leonard N. Stern School of Business, Department of Economics in its series Working Papers with number 08-16.

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Date of creation: 2008
Handle: RePEc:ste:nystbu:08-16
Contact details of provider: Postal:
New York University, Leonard N. Stern School of Business, Department of Economics, 44 West 4th Street, New York, NY 10012-1126

Phone: (212) 998-0860
Fax: (212) 995-4218
Web page: http://w4.stern.nyu.edu/economics/

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Find related papers by JEL classification:
  • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
  • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
  • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
  • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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  8. Greenstein,Shane & Stango,Victor (ed.), 2006. "Standards and Public Policy," Cambridge Books, Cambridge University Press, number 9780521864503, Diciembre.
  9. Adam Brandenburger & Harborne Stuart, 2007. "Biform Games," Management Science, INFORMS, vol. 53(4), pages 537-549, April.
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  13. Nisvan Erkal & Deborah Minehart, 2007. "Optimal Sharing Strategies in Dynamic Games of Research and Development," EAG Discussions Papers 200707, Department of Justice, Antitrust Division.
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Cited by:

  1. Nancy Gallini, 2011. "Private agreements for coordinating patent rights: the case of patent pools," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2011(3), pages 5-30.
  2. Norbäck, Pehr-Johan & Persson, Lars & Tå̊g, Joacim, 2014. "Acquisitions, entry, and innovation in oligopolistic network industries," International Journal of Industrial Organization, Elsevier, vol. 37(C), pages 1-12.
  3. Raven, Michael & Blind, Knut, 2017. "The characteristics and impacts of scientific publications in biotechnology research referenced in standards," Technological Forecasting and Social Change, Elsevier, vol. 115(C), pages 167-179.
  4. Timothy Simcoe, 2014. "Governing the Anticommons: Institutional Design for Standard-Setting Organizations," Innovation Policy and the Economy, University of Chicago Press, vol. 14(1), pages 99-128.
  5. Annalisa Biagi & Vincenzo Denicolò, 2014. "Timing of Discovery and the Division of Profit With Complementary Innovations," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(1), pages 89-102, 03.
  6. Athanasopoulos, Thanos, 2014. "Compatibility, Intellectual Property,Innovation and Welfare in Durable Goods Markets with Network Effects," The Warwick Economics Research Paper Series (TWERPS) 1043, University of Warwick, Department of Economics.
  7. Blind, Knut & Mangelsdorf, Axel, 2016. "Motives to standardize: Empirical evidence from Germany," Technovation, Elsevier, vol. 48, pages 13-24.
  8. Aoki, Reiko & Arai, Yasuhiro, 2013. "Standards and Innovation: Technology vs. Installed Base," CIS Discussion paper series 601, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  9. Blind, Knut & Petersen, Sören S. & Riillo, Cesare A.F., 2017. "The impact of standards and regulation on innovation in uncertain markets," Research Policy, Elsevier, vol. 46(1), pages 249-264.
  10. AOKI Reiko & ARAI Yasuhiro, 2013. "Evolution of Standards and Innovation," Discussion papers 13075, Research Institute of Economy, Trade and Industry (RIETI).
  11. Aoki, Reiko & Arai, Yasuhiro, 2014. "Evolution of Standards and Innovation," CIS Discussion paper series 619, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  12. Timothy Simcoe, 2013. "Governing the Anticommons: Institutional Design for Standard-Setting Organizations," NBER Chapters,in: Innovation Policy and the Economy, Volume 14, pages 99-128 National Bureau of Economic Research, Inc.

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