Converters, Compatibility, and the Control of Interfaces

By Joseph Farrell, Garth Saloner. 2015

114 citations recorded by the source corpus.

Converters, emulators, or adapters can often make one technology partially compatible with another. The authors 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. The authors 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. Copyright 1992 by Blackwell Publishing Ltd.

Subfields: Economics and Econometrics, Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/30f34908436d755b7c839fc211249d0d5158679d

Citations in the corpus

• Platform Competition: A Systematic and Interdisciplinary Review of the Literature (2020, unknown): “…the quality of a technology (e.g., Choi, 1994; Economides, 1996), product compatibility decisions (e.g., Besen & Farrell, 1994; Choi, 1994; Farrell & Saloner, 1992; Katz & Shapiro, 1994; J. Y. Kim, 2002), and outcomes like market share and social welfare (Baake & Boom, 2001; Takeyama,…”
• A Managerial Perspective on the Logic of Increasing Returns (2000, unknown): “Compatibility, necessary to allow products to function in harmony with complementary products, can be ensured by standardization of the technological infrastructure (Farrell and Saloner, 1992).”