Information sharing strategies in a standards contest: The case of 2G wireless communication

Abstract

Advocates of new technologies must persuade potential adopters to select their product in the absence of full information about its benefits. For technologies whose value is driven by network externalities, this process often begins before development is complete and the risk to adopters of making the wrong choice can be especially high. We examine whether technology advocates use discernable strategies to overcome these challenges and influence adopters during a standards war. Based on a case study of the 2nd generation (2G) standards contest in the United States wireless telephone industry, we find evidence of two distinct information sharing strategies, which we label as cascade and broadcast. Advocates' use of these strategies varies over the course of a standards battle, shifting from cascade to broadcast.