Antitrust & Competition Policy Blog

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

A Member of the Law Professor Blogs Network

Tuesday, January 17, 2012

Walled Garden Rivalry: The Creation of Mobile Network Ecosystems

Posted by D. Daniel Sokol

Thomas W. Hazlett, George Mason University Dept. of Economics and School of Law, David J. Teece, University of California, Berkeley - Business & Public Policy Group, and Leonard Waverman, London Business School have written on Walled Garden Rivalry: The Creation of Mobile Network Ecosystems.

ABSTRACT: Dynamic competitive forces are dramatically altering mobile markets in the U.S. and around the world. Wireless networks, having sunk considerable capital in the creation of phone systems, must not only compete among themselves for subscribers, but also need to form strategic alliances with emerging handset application platforms (HAPs) created by such firms as Research in Motion (Blackberry), Apple (iPhone), and Google (Android). Current developments illustrate two fundamental aspects of innovation. First, that innovations created by one set of investors may generate returns for complementary suppliers, either via coordinated activity (strategic platforms) or competitive rivalry (appropriation). Second, that the efficiency of such ecosystems may be enhanced by market structure innovations that either extend vertical control or delimit it. This runs counter to the prevailing popular and regulatory sentiment that “open” platforms offer categorically superior welfare outcomes than do “closed” systems – aka “walled gardens.”

http://lawprofessors.typepad.com/antitrustprof_blog/2012/01/walled-garden-rivalry-the-creation-of-mobile-network-ecosystems.html

| Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef01539423e9ef970b

Listed below are links to weblogs that reference Walled Garden Rivalry: The Creation of Mobile Network Ecosystems:

Comments

Post a comment