nep-net New Economics Papers
on Network Economics
Issue of 2009‒08‒30
one paper chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Competing Industrial Standards and the Impact of Trade Liberalization:Revised and Enlarged By Toru Kikuchi; Kazumichi Iwasa

  1. By: Toru Kikuchi (Graduate School of Economics, Kobe University); Kazumichi Iwasa (Kyoto Institute of Economic Research, Kyoto University)
    Abstract: The main purpose of this study is to illustrate, with simple trade theory, the relationship between competing industrial standards and trade liberalization. We assume that there are two competing industrial standards in an international context, each of which applies to a group of differentiated products. A product can be used only in combination with other products based on the same industrial standard.We examine the impact of trade liberalization (i.e., a decline in trade costs) on consumersf choice of a standard. It will be shown that the degree of indirect network effects, captured with substitution between differentiated products, plays an important role as a determinant of the impact of trade liberalization.
    Date: 2009–08

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