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Technical Standards as Public Goods: Demand Incentives for Cooperative Behavior

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  • Sanford V. Berg

    (University of Florida)

Abstract

Technical standards can be viewed as a public good, in that one firm can use a standard without diminishing another firm's use of the standard. Drawingfrom developments in radio and television, this study illustrates the choice of technical standards by manufacturers. From the consumers'perspective, joint use of particular technical standards by firms reduces the likelihood of premature technological obsolescence and increases the quantity of comple mentary goods (broadcasts) available to the owners of receivers. The decision by each firm to choose an identical standard creates compatibility, expanding market demand. Thus the choice of a technical standard by each broadcaster involves an externality.

Suggested Citation

  • Sanford V. Berg, 1989. "Technical Standards as Public Goods: Demand Incentives for Cooperative Behavior," Public Finance Review, , vol. 17(1), pages 29-54, January.
    • Handle: RePEc:sae:pubfin:v:17:y:1989:i:1:p:29-54
    DOI: 10.1177/109114218901700102
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    References listed on IDEAS

    as
    1. Joseph Farrell & Garth Saloner, 1985. "Standardization, Compatibility, and Innovation," RAND Journal of Economics, The RAND Corporation, vol. 16(1), pages 70-83, Spring.
    2. repec:bla:kyklos:v:36:y:1983:i:3:p:377-96 is not listed on IDEAS
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    5. Berg, Sanford V., 1988. "Duopoly compatibility standards with partial cooperation and standards leadership," Information Economics and Policy, Elsevier, vol. 3(1), pages 35-53.
    6. Charles P. Kindleberger, 1983. "Standards as Public, Collective and Private Goods," Kyklos, Wiley Blackwell, vol. 36(3), pages 377-396, August.
    7. Borcherding, Thomas E, 1978. "Competition, Exclusion, and the Optimal Supply of Public Goods," Journal of Law and Economics, University of Chicago Press, vol. 21(1), pages 111-132, April.
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    Cited by:

    1. Kim, Heejung, 2012. "Standardization in technology adoption: A comparison of broadcast TV cases," 19th ITS Biennial Conference, Bangkok 2012: Moving Forward with Future Technologies - Opening a Platform for All 72483, International Telecommunications Society (ITS).
    2. Funk, Jeffrey L. & Methe, David T., 2001. "Market- and committee-based mechanisms in the creation and diffusion of global industry standards: the case of mobile communication," Research Policy, Elsevier, vol. 30(4), pages 589-610, April.

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