Unlocking technology: Antitrust and innovation

Daniel F. Spulber*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

29 Scopus citations

Abstract

Technology lock-in advocates argue that governments should step in to coordinate technology adoption decisions. Due to the presence of network effects, advocates warn that consumers may fail to adopt the best technology, thus missing out on potential benefits. Even worse, consumers may split, adopting multiple technologies and thus missing out on the benefits of network effects. Due to coordination problems, consumers cannot mitigate the effects of bad technology choices and the economy becomes stuck with inferior innovations. This article demonstrates that consumer coordination solves the underlying network effects problem, thus eliminating technology lock-in. Network effects are confined at most to the information and communications technology and selected electronics industries, which have developed mechanisms for interconnection and interoperability. Firms have incentives to provide interconnection and interoperability when it is efficient to do so. Rapid technological innovation is apparent whereas technology lock-in is a rare phenomenon. Antitrust policy founded on technology lock-in arguments is misguided and is likely to damage incentives for innovation.

Original languageEnglish (US)
Pages (from-to)915-966
Number of pages52
JournalJournal of Competition Law and Economics
Volume4
Issue number4
DOIs
StatePublished - 2008

ASJC Scopus subject areas

  • Economics and Econometrics
  • Law

Fingerprint Dive into the research topics of 'Unlocking technology: Antitrust and innovation'. Together they form a unique fingerprint.

Cite this