Evolving Technologies and Standards Regulation

Cabral, Luis and Salant, David (2014) Evolving Technologies and Standards Regulation. International Journal of Industrial Organization, 36. pp. 48-56.

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Official URL: http://tse-fr.eu/pub/27693

Abstract

The EU mandated a single standard for second generation wireless telecommunications, whereas the US allowed several incompatible standards to battle for market share. Motivated by this example, we argue that a single standard leads to a free riding problem, and thus to a significant decrease in marginal incentives for R&D investment. In this context, keeping two separate standards may be a necessary evil to sustain a high level of R&D expenditures. We also provide conditions such that a non-standardization equilibrium is better for consumers and for society as a whole.

Item Type: Article
Language: English
Date: September 2014
Refereed: Yes
Uncontrolled Keywords: Standardization, Innovation, Free-riding, Spectrum regulation
JEL codes: L13 - Oligopoly and Other Imperfect Markets
L51 - Economics of Regulation
L52 - Industrial Policy; Sectoral Planning Methods
L96 - Telecommunications
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 16 Mar 2015 14:41
Last Modified: 24 Jan 2019 00:09
OAI ID: oai:tse-fr.eu:27693
URI: http://publications.ut-capitole.fr/id/eprint/16482

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