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Co-opetition in Standard-Setting: The Case of the Compact Disc

Authors/Editors: Kretschmer, T.
Mühlfeld, K.
Published: 2004
Type: Working Papers
Published by: NET Institute Working Papers
: 04-14, Networks, Electronic Commerce, and Telecommunications (NET) Institute


The success of the CD has (partly) been attributed to the ability of Sony, Philips and Matsushita to cooperate in the run-up to the DAD conference in 1981, where the technological standard was set. We model the situation leading up to the conference in a simple game with technological progress and the possibility of prelaunching a technology. We identify players' tradeoffs between prelaunching (which ends technological progress) and continued development (which involves the risk of being pre-empted). Contrasting outcomes with complete and incomplete information, we find that there appeared to be considerable uncertainty about rivals' technological progress.

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