The Economics Of Compatibility Standards: An Introduction To Recent Research¹

¹Preparation of this review was begun in connection with work supported by a grant from the National Science Foundation, Division of Information, Robotics and Intelligent Systems' Program on Information Impact. The authors are grateful to Joseph Farrell, W. Edward Steinmueller, and Peter Swann for comments and suggestions on earlier drafts. Richard McMasters provided excellent assistance with the final version of the bibliographic references and the text.

Abstract

This paper surveys the contributions that economists have made to understanding standards-setting processes and their consequences for industry structure and economic welfare. Standardization processes of four kinds are examined, namely: (1) market competition involving products embodying unsponsored standards, (2) market competition among sponsored (proprietary) standards, (3) agreements within voluntary standards-writing organizations, a18d (4) direct governmental promulgation. The major trajectories along which research has been moving are described and related to both the positive and the normative issues concerning compatibility standards that remain to be studied.

¹Preparation of this review was begun in connection with work supported by a grant from the National Science Foundation, Division of Information, Robotics and Intelligent Systems' Program on Information Impact. The authors are grateful to Joseph Farrell, W. Edward Steinmueller, and Peter Swann for comments and suggestions on earlier drafts. Richard McMasters provided excellent assistance with the final version of the bibliographic references and the text.

¹Preparation of this review was begun in connection with work supported by a grant from the National Science Foundation, Division of Information, Robotics and Intelligent Systems' Program on Information Impact. The authors are grateful to Joseph Farrell, W. Edward Steinmueller, and Peter Swann for comments and suggestions on earlier drafts. Richard McMasters provided excellent assistance with the final version of the bibliographic references and the text.

Notes

¹Preparation of this review was begun in connection with work supported by a grant from the National Science Foundation, Division of Information, Robotics and Intelligent Systems' Program on Information Impact. The authors are grateful to Joseph Farrell, W. Edward Steinmueller, and Peter Swann for comments and suggestions on earlier drafts. Richard McMasters provided excellent assistance with the final version of the bibliographic references and the text.