The Production of Compatibility: Technical Standards as Collective Goods (original) (raw)

Compatibility, Standardization, and Network Effects: Some Policy Implications

Oxford Review of Economic Policy, 2002

Given the dramatic growth of the Internet and information-technology industries in general, and the importance of interconnection in these networks, the economics of compatibility and standardization has become mainstream economics. In this paper, I examine several key policy aspects of standard setting in industries with network effects.

Compatibility, standards, and software production

1998

UNIVERSITADI GENOVA s Compatibility is a key strategic decision in software production. Proposals exist for standards in several fields of software production, such as networking (ISO and IEEE), operating systems (Posix), and object management (OMG). However, a formal treatment of standards in software is still missing. This article tries to overcome this lack, presenting a model of the effects of compatibility in software production.

The logic of Technical Standardisation: A Politico-Economic Model

In this paper technical standardisation is understood and explained in a model where economic analysis is coupled with an analysis of the political system as proposed in rational choice theory. The aim is to answer both the question why various countries (e.g. the United States versus European countries) let either the market or public intervention determine the mode of technical standardisation and the possible implications of these two ways of organizing technical standardisation from an economic and a political point of view. Based upon the analysis of the paper a couple of general policy recommendations are made concerning the mode of technical standardisation.

Desirability of Compatibility In the Absence of Network Externalities

The American Economic Review, 1989

I compare the incentives firms have to produce individual components compatible with components of other manufacturers instead of "systems" composed of components that are incompatible with components of competing manufacturers. I show that, even in the absence of positive consumption externalities ("network" externalities), prices and profits will be higher in the regime of compatibility. Equilibrium total surplus could be higher in either regime. Both regimes overprovide variety compared to the surplus-maximizing solution.

Assessment of Technical Harmonization and Conformity in the Global Market

2012

The effects of globalization are increasingly felt all over the world. The world is becoming more homogeneous, since different kinds of products can be offered to a wider range of customers. One of the essential preconditions for free movement of goods between states and unions of states is harmonisation of their technical requirements. The EU has determined requirements for goods in order to avoid any damage they could create for human health, life and environment. Thus, the importance of conformity assessment grows along with increase of trade volumes between states. The conformity assessment sphere is characterised by guaranteed product safety: product compliance with certain requirements is certified. The article aims to evaluate technical harmonization of product requirements, conformity assessment system, to analyse its development and changes before and after Latvia’s accession to the EU single market. The research reflects the relationship between the conformity assessment s...

The Nature of the Externality in Systems Compatibility Decisions

Katz and Shapiro (AER forthcoming) have analyzed the impact of competition on compatibmty in the context of network externalities. This note presents an alternative approach which utilizes a technological externality. Marginal valuation does not rise when sales increase. Rather, the existence of incompatibilities directly dampens demand. The approach is applied to three areas: equilibrium outcomes under cooperation and rivalry, strategic consideration related to insulating a product from a rival's actions, and vertical aspects of compatibility.

Introduction: Standards and the Global Economy

Business History Review

S tandards for measurement, for compatibility, for performance, and for other characteristics of products are ubiquitous. They have been central to businesses in all the lead industries since the Industrial Revolution, including today's global manufacturing firms, which depend on intricate supply chains based on standard shipping containers, and businesses that are based on the Internet and the World Wide Web, which rely on thousands of computer and telecommunication standards. Standards have also helped transform, and often markedly improve, the lives of average citizens in industrialized countries: water and sewer systems, electric lights and phones, and every modern home entertainment system would have been inconceivable without the modern standard-setting system. Yet, standards and standard setting are not widely studied by historians of the global economy, including business historians. Only a few business historians have focused on the complex, hybrid system of public and private organizations that creates standards, either broadly or in specific technical domains. 1 The articles included in this special issue demonstrate both the relevance of standard setting to business

Evolving Technologies and Standardization

We consider a model of R&D competition and cooperative standards set- ting. The quality of each technology design evolves over time as a result of each firm’s R&D expenditure. We argue that standardization — at least early stan- ...

Standardization, Not Standards Matter

Advances in Human Resources Management and Organizational Development, 2019

It has been observed that standards (and implicitly, standardization) are a hallmark of an industrialized society, since standards provide the necessary interconnections to make things interoperate. As the world tends increasingly towards a “global economy,” just-in-time supply chains, and massive interdependencies, standards and standardization forms the infrastructure of these agreements. And yet, standardization is not well understood. This chapter explores standardization.