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Compatibility Standards And Industry Competition: Two Case Studies

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  • William Lehr

Abstract

Case histories of two data communication interfaces provide evidence of complex strategic behavior in the setting of voluntary compatibility standards. These cases show how subtle differences in the design of standards development organizations affect incentives to cooperate, giving rise to systematic venue preferences. Dominant firms prefer more bureaucratic procedures offering greater protection for the status quo. The two interfaces, FDDI (under development in X3) and DQDB (under development in the IEEE) shed light on competition between the computer and telecommunications industries and the evolution of our communications infrastructure. They demonstrate the importance of standards for intra- and inter-industry competition.

Suggested Citation

  • William Lehr, 1996. "Compatibility Standards And Industry Competition: Two Case Studies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 4(2), pages 97-112.
    • Handle: RePEc:taf:ecinnt:v:4:y:1996:i:2:p:97-112
    DOI: 10.1080/10438599600000002
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    References listed on IDEAS

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    1. Besen, Stanley M., 1990. "The European Telecommunications Standards Institute : A preliminary analysis," Telecommunications Policy, Elsevier, vol. 14(6), pages 521-530, December.
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    Cited by:

    1. Benjamin Chiao & Josh Lerner & Jean Tirole, 2007. "The rules of standard-setting organizations: an empirical analysis," RAND Journal of Economics, RAND Corporation, vol. 38(4), pages 905-930, December.
    2. Justus Baron & Kirti Gupta, 2018. "Unpacking 3GPP standards," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(3), pages 433-461, September.
    3. Werle, Raymund, 2001. "Standards in the international telecommunications regime," HWWA Discussion Papers 157, Hamburg Institute of International Economics (HWWA).
    4. Bonani, Michela, 2023. "Essays on innovation, cooperation, and competition under standardization," Other publications TiSEM 1c87d7fc-2c24-430a-9d4e-1, Tilburg University, School of Economics and Management.
    5. Werle, Raymund, 2001. "Standards in the International Telecommunications Regime," Discussion Paper Series 26265, Hamburg Institute of International Economics.
    6. Frank Borowicz & Ewald Scherm, 2001. "Standardisierungsstrategien: Eine erweiterte Betrachtung des Wettbewerbs auf Netzeffektmärkten," Schmalenbach Journal of Business Research, Springer, vol. 53(4), pages 391-416, June.
    7. Roberto Fontana & Alessandro Nuvolari & Bart Verspagen, 2009. "Mapping technological trajectories as patent citation networks. An application to data communication standards," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(4), pages 311-336.
    8. Baron, Justus & Kanevskaia, Olia, 2023. "Wearing multiple hats—The role of working group chairs’ affiliation in standards development," Research Policy, Elsevier, vol. 52(9).

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