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Standardization, Compatibility, and Innovation
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.
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“The process by which standards are developed is also of concern to economists, philosophers, and * T. W. Malone and K. Crowston others [Farrell and Saloner 1985;Hirsch 19871.”
From The interdisciplinary study of coordination (1994) · cites this paper as Farrell and Saloner 1985
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Metadata
- Authors
- Farrell, J., & Saloner, G.
- Venue
- The RAND Journal of Economics
- Publisher
- Wiley
- Published
- 1985
- Volume
- 16
- Issue
- 1
- Pages
- 70
- ISSN
- 0741-6261 (ISSN-L)
- OpenAlex
- W2072197860
- Cited by
- 2,597
- References
- 0
- FWCI
- 51.60
- Type
- journal article
- Language
- en
- Open access
- closed
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.