Strategic Behavior in Standard-Setting Organizations

Interoperability, Competition Policy and Antitrust and Standards

Article Snapshot

Author(s)

Brian J. DeLacey, Kerry Herman, David J. Kiron and Josh Lerner

Source

Harvard NOM Working Paper No. 903214, 2006

Summary

The paper looks at how firms behave when setting standards.

Policy Relevance

Standard-setting organizations can work well, but sometimes firms distort the process for their own reasons.

Main Points

  • Innovation often involves many products developed by many firms. Technical standards describe how the products work so that the firms can coordinate their technology.

  • Firms meet with standard-setting organizations such as the Institute of Electrical and Electronics Engineers (IEEE) to choose the technology for the standard.

  • When participants agree up front how the process will work, standard-setting can work well to choose the best technology (DSL is an example).

  • Sometimes firms try to manipulate the standard to their own advantage; this can result in private agreements that bypass the standard.

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