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| Author: | Farrell, J. Saloner, G. |
| Title: | Converters, compatibility, and the control of interfaces |
| Journal: | Journal of Industrial Economics
1992 : MAR, VOL. 40:1, p.9-35 |
| Index terms: | COMPUTER INDUSTRY TECHNOLOGY STANDARDS COMPETITION INNOVATION |
| Language: | eng |
| Abstract: | Compatibility is a crucial aspect of performance in many industries, especially the information industries. Converters, emulators, or adapters can often make one technology partially compatible with another. A certain degree of compatibility can often be achieved ex post at cost. The equilibrium market adoption of otherwise incompatible technologies is analyzed. It is found that when one of the technologies is supplied only by a single form, that firm may have an incentive to make conversion costly. This may lend some theoretical support to allegations of anticompetitive disruption of interface standards. But standardization has its own costs. In addition, it may retard innovation. |
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