TY - JOUR
T1 - Unlocking technology
T2 - Antitrust and innovation
AU - Spulber, Daniel F.
PY - 2008
Y1 - 2008
N2 - 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.
AB - 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.
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U2 - 10.1093/joclec/nhn016
DO - 10.1093/joclec/nhn016
M3 - Article
AN - SCOPUS:57849094991
SN - 1744-6414
VL - 4
SP - 915
EP - 966
JO - Journal of Competition Law and Economics
JF - Journal of Competition Law and Economics
IS - 4
ER -