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The Dutch Banking Chipcard Game

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  • Henk J. de Vries
  • George W. J. Hendrikse

Abstract

The banks in the Dutch chipcard market initially agreed on one chipcard system. One system is attractive for companies as well as consumers. Companies, banks, and retailers prevent costs of duplication, while consumers enjoy the benefits of a widespread acceptance of one card and do not face uncertainty regarding the chipcard standard. Two standards could harm the development of the chipcard market. However, Postbank withdrew from the initial agreement and introduced its own chipcard system in December 1995. This has resulted in a costly battle between the two banking chipcard standards, duplication costs for retailers, the introduction of a gateway technology in order to establish compatibility for users, and low market acceptance of chipcards. In March 2001, after a struggle of more than five years, the banks decided to return to one chipcard. The rationality of Postbank’s decision to withdraw, despite the prospect that everybody may be worse off, will be analyzed from the perspective of game theory and the theory regarding standards battles.

Suggested Citation

  • Henk J. de Vries & George W. J. Hendrikse, 2001. "The Dutch Banking Chipcard Game," International Studies of Management & Organization, Taylor & Francis Journals, vol. 31(1), pages 106-125, March.
    • Handle: RePEc:taf:mimoxx:v:31:y:2001:i:1:p:106-125
    DOI: 10.1080/00208825.2001.11656810
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    Cited by:

    1. de Vries, H.J., 2019. "Standardisation Management," ERIM Inaugural Address Series Research in Management EIA 2019-079-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam..
    2. van de Kaa, Geerten & de Vries, Henk J., 2015. "Factors for winning format battles: A comparative case study," Technological Forecasting and Social Change, Elsevier, vol. 91(C), pages 222-235.
    3. Wiegmann, Paul Moritz & de Vries, Henk J. & Blind, Knut, 2017. "Multi-mode standardisation: A critical review and a research agenda," Research Policy, Elsevier, vol. 46(8), pages 1370-1386.

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