Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Thursday, January 20, 2011

Why are some coalitions more successful than others in setting standards? Empirical evidence from the Blu-ray vs. HD-DVD standard war

Posted by D. Daniel Sokol

Zouhaïer M'chirgui (CREM, LAREQUAD - Euromed Management - Euromed Management), Olivier Chanel (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579), and Didier Calcei (Groupe ESC Troyes - ESC Troyes - ESC Troyes) ask Why are some coalitions more successful than others in setting standards? Empirical evidence from the Blu-ray vs. HD-DVD standard war.

ABSTRACT: Standard-setting coalitions are increasingly composed of rival firms from different sectors and are characterized by simultaneous and/or sequential cooperation and competition among their members. This paper examines why firms choose to belong to two standard-setting coalitions instead of one and what determines the success of a standard coalition. We test empirically for network effect, experience effect, and coopetitive effect in the Blu-ray vs. HD-DVD standard war. We find that the higher the similarity of the members in the coalition, the greater the probability of standard coalition success. Furthermore, relatedness leads to a greater probability of joining both competing coalitions, but at a given degree of knowledge difference, an opposite effect exists.

http://lawprofessors.typepad.com/antitrustprof_blog/2011/01/why-are-some-coalitions-more-successful-than-others-in-setting-standards-empirical-evidence-from-the.html

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