Standard-Creating Coalitions: Open vs. Proprietary Standards (original) (raw)

1 This paper studies the impact of entrepreneurial decisions regarding standard creation in an oligopolistic market with cooperative R&D investments. Our game-theoretic analysis shows that if standards are open and only multistandard equilibria are allowed, it is impossible to attain a stable multi-standard equilibrium. However, if standards are proprietary, …rms can reach two stable multi-standard equilibria. These stable equilibria imply the creation of two proprietary standards: symmetric in one equilibrium and asymmetric in the other, where the asymmetric equilibrium only exists when the innovating …rms are strongly e¢ cient in R&D. JEL Classi…cation: C72, D21, O31