Title: International standard-setting alliance and its possible negative effect on consumer's technology acceptance and technology progress

Authors: Wei Li; Xuemei Wang

Addresses: School of Economics and Management, Chongqing University of Posts and Telecommunications, Chongqing, China ' Department of Management, Chongqing Vocational College of Light Industry, Chongqing, China

Abstract: Based on Theory of Consumer Choice and the research method of game modelling, this paper discusses one potential outcome generated by the international standard-setting alliance, which may negatively influence the consumer's technology acceptance of emerging superior technology and slow down the pace of technological progress. We obtain the following conclusions. First, it is shown that (international) industrial standard-setting alliance is indeed true of potential power to restrain subsequent competing technologies including superior technology, and such crowding-out effect is positively impacted by the market power (measured by alliance size) of standard-setting alliance. The realisation of the crowding-out effect could be explained by the lock-in effect exerted on consumers by present technology through standard-setting alliance established by incumbent firms. Second, as optional tactics, to increase the compatibility between subsequent technology and incumbent technology, or to increase the utility of subsequent technology are helpful to correct consumer's choice and diminish the crowding-out effect of standard-setting alliance on subsequent competing superior technology. Third, the size and market power of standard-setting alliance needs to be properly monitored and controlled, so as to mitigate its improper intervention on consumer's technology choice and its negative influence on technology innovation and progress.

Keywords: standard-setting alliance; technology standard; technology innovation; Hotelling model.

DOI: 10.1504/EJIM.2024.140935

European Journal of International Management, 2024 Vol.24 No.2, pp.267 - 283

Accepted: 04 Apr 2020
Published online: 04 Sep 2024 *

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