Persuading to participate: Coordination on a standard
Articles
Overview
published in
publication date
- September 2021
start page
- 1
end page
- 23
volume
- 78
Digital Object Identifier (DOI)
International Standard Serial Number (ISSN)
- 0167-7187
Electronic International Standard Serial Number (EISSN)
- 1873-7986
abstract
- We study coordination among competitors in the shadow of a market mechanism. Our main example is standard setting: either firms coordinate through a standard-setting organization (SSO), or a market solution—a standards war—emerges. A firms veto to participate in the SSO triggers a standards war. Participation constraints are demanding, and the optimal SSO can involve on-path vetoes. We show that vetoes are effectively deterred if firms can (partially) release their private information to the public. We discuss several business practices that can serve as a signaling device to provide that information and to effectively ensure coordination.
Classification
subjects
- Business
- Economics
keywords
- innovation; standard-setting organizations; patents; persuasion; coordination