Standards, Innovation and Consortia

Justus Baron (), Yann Ménière () and Tim Pohlmann
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Justus Baron: Northwestern University [Evanston], CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique
Tim Pohlmann: TUB - Technical University of Berlin / Technische Universität Berlin, CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique

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Abstract: The development of formal ICT standards is a challenging form of collaborative innovation, combining consensus decision making and R&D rivalry. To supplement this formal standard setting process, it has thus become frequent that part of the involved firms creates ad hoc consortia to better align positions on a common technology roadmap. This paper aims to assess whether such consortia can effectively mitigate R&D coordination failure through enhanced cooperation. We first develop a theoretical model showing that depending on the nature of firms' incentives to contribute proprietary technology, different types of R&D coordination failure – namely a Public Good or Rent Seeking problem – may occur in equilibrium. Using a large panel of standards, we then confirm empirically the prediction that consortia have different effects on innovation under a Public Good or Rent Seeking regime. Overall, we observe an increase in innovation after a firm joined a consortium. However, this effect is significantly weakened or even reversed for standards characterized by a strong Rent Seeking regime.

Keywords: Innovation; Consortium; Patents; Essential patents; Standards; ICT; Consortia; Research-and-Development; Setting organizations; Telecommunications (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (10)

Published in International Journal of Industrial Organization, 2014, Standards, Intellectual Property & Innovation, 36, pp.22-35. ⟨10.1016/j.ijindorg.2014.05.004⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01111043

DOI: 10.1016/j.ijindorg.2014.05.004

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