Differentiation Across Standards and Adoption Failure in 56K Modems

Marc Rysman

No 03-12, Working Papers from NET Institute

Abstract: 56K modems were introduced under two competing incompatible standards. We show the importance of competition between Internet Service Providers in the adoption process. We show that ISP’s were less likely to adopt the technology that more competitors adopted. This result is particularly striking given that industry participants expected coordination on one standard or the other. We speculate about the role of ISP differentiation in preventing the market from achieving standardization until a government organization intervened.

JEL-codes: L15 L63 L86 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2003-12, Revised 2003-12
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