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
12 - Should competition policy favor compatibility?
Published online by Cambridge University Press: 22 September 2009
- 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
A widespread “pro-standards view” holds that compatibility standards and modularity are beneficial but are under-supplied by imperfect markets. The author stresses that this view is not unambiguously proven by economic logic, but tentatively concludes that it is more right than wrong, especially where it affects horizontal competition.
Introduction
Standards mavens often think that compatible competition is more competitive, more efficient, and more salubrious than incompatible competition; and they worry that private interests do not reliably reflect these social advantages. Such a view suggests that policy should seek compatibility and should guard against sabotage by special interests that gain from incompatibility.
Economists know that this pro-standards view (PSV) is not always right: It depends. Yet, stressing “on the one hand versus on the other hand” may give policymakers the wrong idea. As a step toward averting that problem, I undertake the uncomfortable project of going beyond “it depends” – even though it does. At a rigorous level, any such attempt must fail, but if I push myself to decide anyway, I make the judgment call that policy probably should thoughtfully encourage compatibility, especially in horizontal contexts. The PSV channels the spirit of much sound economic analysis: The standards mavens are more right than wrong.
Outside the horizontal context, the key question is, How does competition deal with complementarities? Ambivalence on that question infests telecommunications policy and a wide swath of antitrust, including tying, aftermarket competition, essential facilities, intrabrand competition, and bundling.
- Type
- Chapter
- Information
- Standards and Public Policy , pp. 372 - 388Publisher: Cambridge University PressPrint publication year: 2006
References
- 5
- Cited by