Abstract
There are often benefits to consumers and to firms from standardization of a product. We examine whether these standardization benefits can trap an industry in an obsolete or inferior standard when there is a better alternative available. With complete information and identical preferences among firms the answer is no; but when information is incomplete this excess inertia can occur. We also discuss the extent to which the problem can be overcome by communication.
Keywords
StandardizationCompatibility (geochemistry)InertiaIndustrial organizationRisk analysis (engineering)New product developmentBusinessEconomicsComputer scienceMicroeconomicsMarketingEngineering
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Publication Info
- Year
- 1985
- Type
- article
- Volume
- 16
- Issue
- 1
- Pages
- 70-70
- Citations
- 2593
- Access
- Closed
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Cite This
Joseph Farrell,
Garth Saloner
(1985).
Standardization, Compatibility, and Innovation.
The RAND Journal of Economics
, 16
(1)
, 70-70.
https://doi.org/10.2307/2555589
Identifiers
- DOI
- 10.2307/2555589