Author: | Katz, M. C. Shapiro, C. |
Title: | Technology adoption in the presence of network externalities. |
Journal: | Journal of Political Economy
1986 : AUG, VOL. 94:4, p. 822-841 |
Index terms: | INNOVATION EXTERNALITIES |
Language: | eng |
Abstract: | Technology adoption is analyzed in industries where network externalities are significant. Key findings are: (1) compatibility tends to be undersupplied by the market,but excessive standardization can occur, (2) in the absence of sponsors,the technology superior today has a strategic advantage and is likely to dominate the market, (3) when one or two rival technologies are sponsored,that technology has a strategic advantage and may be adopted even if it is inferior, (4) when two competing technologies both are sponsored,the technology that will be superior tomorrow has a strategic advantage. |
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