Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Choosing How to Compete: Strategies and Tactics in Standardization
Journal of Economic Perspectives
(pp. 117–131)
(Complimentary)
Abstract
In a network industry, each firm must decide whether or not it wants its product to be compatible with those of rivals. This horizontal compatibility strategy determines whether competition is a battle to establish a standard or the more conventional competition within a standard. The two forms of competition involve different tactics and may differ in the extent to which they dissipate industry profits. In some cases, all firms in an industry may prefer the same form of competition. In other cases, firms may prefer different forms of competition and either may prevail.Citation
Besen, Stanley M., and Joseph Farrell. 1994. "Choosing How to Compete: Strategies and Tactics in Standardization." Journal of Economic Perspectives 8 (2): 117–131. DOI: 10.1257/jep.8.2.117JEL Classification
- L11 Production, Pricing, and Market Structure; Size Distribution of Firms
- L23 Organization of Production
- L13 Oligopoly and Other Imperfect Markets