e-journal
INNOVATION ECONOMICS: THE INTERPLAY AMONG TECHNOLOGY STANDARDS, COMPETITIVE CONDUCT, AND ECONOMIC PERFORMANCE
Industries with technological standards can be highly competitive and innovative.
The modern approach to Innovation Economics understands that technology
standards, the competitive conduct of firms, and the economic performance of innovative
industries are endogenous and jointly determined. Market competition
and standards organizations endogenously determine technology standards, which
are consistent with innovative efficiency. This contrasts with traditional Innovation
Economics, which can be summarized as a “Standards-Conduct-Performance”
paradigm. The traditional view, which is reminiscent of the traditional Industrial
Organization “Structure-Conduct-Performance” paradigm, incorrectly assumes
that technology standards are exogenous and cause imperfectly competitive
conduct and inefficient economic performance. Instead, studies of innovation
should apply game-theoretic models that account for strategic interaction and empirical
tools that control for the interplay among technology standards, competitive
conduct, and economic performance.
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