IDEAS home Printed from https://ideas.repec.org/a/oup/restud/v90y2023i2p597-633..html
   My bibliography  Save this article

Estimating the Costs of Standardization: Evidence from the Movie Industry

Author

Listed:
  • El Hadi Caoui

Abstract

This article studies the decentralized adoption of a technology standard when network effects are present. If the new standard is incompatible with the current installed base, adoption may be inefficiently delayed. I quantify the magnitude of “excess inertia” in the switch of the movie distribution and exhibition industries from 35 mm film to digital. I specify and estimate a dynamic game of digital hardware adoption by theatres and digital movies supply by distributors. Counterfactual simulations establish that excess inertia reduces surplus byrelative to the first-best adoption path; network externalities explainof the surplus loss. Targeted adoption subsidies or a mandate on digital distribution help bridge this welfare gap.

Suggested Citation

  • El Hadi Caoui, 2023. "Estimating the Costs of Standardization: Evidence from the Movie Industry," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(2), pages 597-633.
    • Handle: RePEc:oup:restud:v:90:y:2023:i:2:p:597-633.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/restud/rdac036
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    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:oup:restud:v:90:y:2023:i:2:p:597-633.. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/restud .

    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.