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Converters, Compatibility, and the Control of Interfaces

Joseph Farrell and Garth Saloner
The Journal of Industrial Economics
Vol. 40, No. 1 (Mar., 1992), pp. 9-35
Published by: Wiley
DOI: 10.2307/2950625
Stable URL: http://www.jstor.org/stable/2950625
Page Count: 27
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Converters, Compatibility, and the Control of Interfaces
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Abstract

Converters, emulators, or adapters can often make one technology partially compatible with another. We analyze the equilibrium market adoption of otherwise incompatible technologies, when such converters are available, and the incentives to provide them. While market outcomes without converters are often inefficient, the availability of converters can actually make matters worse. We also find that when one of the technologies is supplied only by a single firm, that firm may have an incentive to make conversion costly. This may lend some theoretical support to allegations of anticompetitive disruption of interface standards.

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