Choosing How to Compete: Strategies and Tactics in Standardization

Stanley Besen and Joseph Farrell ()

Journal of Economic Perspectives, 1994, vol. 8, issue 2, 117-131

Abstract: In a network industry, each firm must decide whether or not it wants its product to be compatible with those of rivals. This horizontal compatibility strategy determines whether competition is a battle to establish a standard or the more conventional competition within a standard. The two forms of competition involve different tactics and may differ in the extent to which they dissipate industry profits. In some cases, all firms in an industry may prefer the same form of competition. In other cases, firms may prefer different forms of competition and either may prevail.

JEL-codes: L11 L13 L23 (search for similar items in EconPapers)
Date: 1994
Note: DOI: 10.1257/jep.8.2.117
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Citations: View citations in EconPapers (225)

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