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Technological Standardization with and without Borders in an Interacting Agents Model

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  • Cowan, Robin
  • Cowan, William

    (MERIT)

Abstract

This paper models an economy in which a large number of agents are choosing among several technologies. There is a single, global, market for the technologies but they are subject to localized network externalities in use. We examine the issue of technological standardization, and the coordination of choices among the agents. We generate equilibirum conditions under two spatial conditions - agents located in a featureless plain, and agents located in pre-existing regions with strong borders. We find the conditions under which standardization exists - globally, only locally, or not at all - and derive the effects of different parameters. The presence of a phase change is demonstrated. An appendix provides a derivation o f the equilibrium condition used in many interacting agents models.

Suggested Citation

  • Cowan, Robin & Cowan, William, 1998. "Technological Standardization with and without Borders in an Interacting Agents Model," Research Memorandum 015, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:umamer:1998015
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    File URL: https://www.merit.unu.edu/publications/rmpdf/1998/rm1998-015.pdf
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    References listed on IDEAS

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    1. Edward L. Glaeser & Bruce Sacerdote & José A. Scheinkman, 1996. "Crime and Social Interactions," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 507-548.
    2. Joseph Farrell & Garth Saloner, 1985. "Standardization, Compatibility, and Innovation," RAND Journal of Economics, The RAND Corporation, vol. 16(1), pages 70-83, Spring.
    3. Brock, W.A. & Durlauf, S.N., 1995. "Discrete Choice with Social Interactions I: Theory," Working papers 9521, Wisconsin Madison - Social Systems.
    4. Steven N. Durlauf, 1993. "Nonergodic Economic Growth," Review of Economic Studies, Oxford University Press, vol. 60(2), pages 349-366.
    5. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    6. A. Bassanini & G. Dosi, 1998. "Competing Technologies, International Diffusion and the Rate of Convergence to a Stable Market Structure," Working Papers ir98012, International Institute for Applied Systems Analysis.
    7. An, M Y & Kiefer, N M, 1995. "Local Externalities and Societal Adoption of Technologies," Journal of Evolutionary Economics, Springer, vol. 5(2), pages 103-117, June.
    8. Paul David & Dominique Foray & Jean-Michel Dalle, 1998. "Marshallian Externalities And The Emergence And Spatial Stability Of Technological Enclaves," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 6(2-3), pages 147-182.
    9. Robin Cowan & William Cowan, 1998. "On Clustering in the Location of R&D: Statics and Dynamics," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 6(2-3), pages 201-230.
    10. William A. Brock, 1993. "Pathways to randomness in the economy: Emergent nonlinearity and chaos in economics and finance," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 8(1), pages 3-55.
    11. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-440, June.
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    Cited by:

    1. Leibbrandt, Gottfried, 2004. "Harmonizing Europe’s payment systems: an uphill battle?," Research Memorandum 020, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    2. Agnès Arabeyre-Petiot, 1999. "Le rôle des liaisons interurbaines dans l’arbitrage métropole-système productif localisé. Cas de la sous-traitance aéronautique dans le Sud-Ouest de la France," Post-Print halshs-01357425, HAL.
    3. Opolot, Daniel, 2012. "Social interactions and complex networks," MERIT Working Papers 014, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. Marian Beise, 2003. "Lead Markets: Drivers of the Global Diffusion of Innovations," Discussion Paper Series 141, Research Institute for Economics & Business Administration, Kobe University.

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    Keywords

    economics of technology ;

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