Working Paper: NBER ID: w10334
Authors: Angelique Augereau; Shane Greenstein; Marc Rysman
Abstract: 56K modems were introduced under two competing incompatible standards. We show the importance of competition between Internet Service Providers in the adoption process. We show that ISPs were less likely to adopt the technology that more competitors adopted. This result is particularly striking given that industry participants expected coordination on one standard or the other. We speculate about the role of ISP differentiation in preventing the market form achieving standardization until a government organization intervened.
Keywords: standards war; 56k modems; internet service providers; technology adoption; competition
JEL Codes: L15; L63; L86
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increased competition among ISPs (L96) | Lower adoption rates of a standard (L15) |
| ISP differentiation (L86) | Prolonged standards war (L15) |
| Number of adopting ISPs (L96) | Adoption probability of a given ISP (L96) |