Collaborative standards development and adoption with network externalities

Mu Xia, Kexin Zhao, Michael J. Shaw

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

We study industry-based collaborative standard development and adoption by firms in a consortium setting, when the standard is open and free. We present a game-theoretical model that recognizes the fact that 1) Firm's decision to develop or adopt is endogenous, e.g. firms only participate in the development if doing so dominates being a passive adopter of the standard or not adopting at all; 2) the standard is jointly developed by all participating firms; 3) the standard adoption has network externalities, i.e. the more firms use the standard, the more valuable it is to all adopters; 4) developing firms have insider benefit based on their involvement in the standardization, which results in lower adoption cost. We find that 1) no firm will want to be a passive adopter if there is no benefit of waiting in adoption; 2) when the benefit of waiting is lower than a threshold, there are no passive adopters and 3) developing firm's contribution is not a function of the network externalities.

Original languageEnglish (US)
Title of host publication2005 International Conference on Services Systems and Services Management, Proceedings of ICSSSM'05
PublisherInstitute of Electrical and Electronics Engineers Inc.
Pages15-18
Number of pages4
ISBN (Print)0780389719, 0780389719, 9780780389717, 9780780389717
DOIs
StatePublished - Jan 1 2005
Event2005 International Conference on Services Systems and Services Management, ICSSSM'05 - Chongquing, China
Duration: Jun 13 2005Jun 15 2005

Publication series

Name2005 International Conference on Services Systems and Services Management, Proceedings of ICSSSM'05
Volume1

Other

Other2005 International Conference on Services Systems and Services Management, ICSSSM'05
CountryChina
CityChongquing
Period6/13/056/15/05

ASJC Scopus subject areas

  • Engineering(all)

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  • Cite this

    Xia, M., Zhao, K., & Shaw, M. J. (2005). Collaborative standards development and adoption with network externalities. In 2005 International Conference on Services Systems and Services Management, Proceedings of ICSSSM'05 (pp. 15-18). [1499425] (2005 International Conference on Services Systems and Services Management, Proceedings of ICSSSM'05; Vol. 1). Institute of Electrical and Electronics Engineers Inc.. https://doi.org/10.1109/icsssm.2005.1499425