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 |
Abstract
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.