Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- Introduction
- 1 Standard setting in markets: the browser war
- 2 Competition through institutional form: the case of cluster tool standards
- 3 The economic realities of open standards: black, white, and many shades of gray
- 4 Coordination costs and standard setting: lessons from 56K modems
- 5 Promoting e-business through vertical IS standards: lessons from the US home mortgage industry
- 6 Intellectual property and standardization committee participation in the US modem industry
- 7 Manipulating interface standards as an anticompetitive strategy
- 8 Delay and de jure standardization: exploring the slowdown in Internet standards development
- 9 Standardization: a failing paradigm
- 10 Standards battles and public policy
- 11 Switching to digital television: business and public policy issues
- 12 Should competition policy favor compatibility?
- Index
- References
1 - Standard setting in markets: the browser war
Published online by Cambridge University Press: 22 September 2009
Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- Introduction
- 1 Standard setting in markets: the browser war
- 2 Competition through institutional form: the case of cluster tool standards
- 3 The economic realities of open standards: black, white, and many shades of gray
- 4 Coordination costs and standard setting: lessons from 56K modems
- 5 Promoting e-business through vertical IS standards: lessons from the US home mortgage industry
- 6 Intellectual property and standardization committee participation in the US modem industry
- 7 Manipulating interface standards as an anticompetitive strategy
- 8 Delay and de jure standardization: exploring the slowdown in Internet standards development
- 9 Standardization: a failing paradigm
- 10 Standards battles and public policy
- 11 Switching to digital television: business and public policy issues
- 12 Should competition policy favor compatibility?
- Index
- References
Summary
Abstract
We study de facto standard setting in markets with network effects. We closely examine the “browser war,” in which Netscape Navigator at first appeared likely to be a de facto standard, but Microsoft Internet Explorer eventually became the standard. This reversal is a puzzle we seek to explain. We draw on the theory of standard setting, especially on the positive economics predictions about market outcomes, such as a tendency to tip and a tendency toward inertia. The basic insights of standard setting theory are borne out in the browser war. In addition, linking standard setting logic to an analysis of market conditions, such as the rate of growth of demand and the distribution system, leads to a complete positive theory of standard setting. This complete theory explains the otherwise surprising reversal.
Introduction
De facto standard setting
We study de facto standard setting in markets with network effects. In markets for system goods – e.g., a computer and the software that runs on it, a CD player and music, a computer connecting to Internet websites – interface standards are particularly important. Like the other chapters in this book, we define interface standards as technical specifications that determine the compatibility or interoperability of different technologies. In such markets, standard setting is linked to the exploitation of network effects.
- Type
- Chapter
- Information
- Standards and Public Policy , pp. 18 - 59Publisher: Cambridge University PressPrint publication year: 2006
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