Assessing the Diffusion of EDI Standards Across Business Communities

Paul Bellflamme
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Paul Bellflamme: CITA University of Namur, Namur, Belgium

Homo Oeconomicus, 1999, vol. 15, 301-339

Abstract: We study the diffusion of a universal EDI message standard. Overall diffusion of such standard may be hindered by the slowness of its development, and by the locally bounded nature of EDI positive network externalities. A model that captures these two factors is analyzed: two firms choose one of two possible standards whose performances evolve differently through time, they use either verbal negotiation or unilateral adoption as coordinating principle. It is shown that if the performance of the universal standard at the end of the game and/or the degree of interconnection between business communities are too low, then the chances for the standard to permeate from one community to another are rather weak.

Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:hom:homoec:v:15:y:1999:p:301-339

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