Summary of Findings

Abstract

Three essays on the evolution of standards in networks have been presented. The first essay has investigated how increasing integration among countries (“globalization”) affects the evolution of global standards. We have introduced an evolutionary game theoretic model, which allows for the explicit analysis of exogenously driven globalization. Our analysis suggests that globalization does not necessarily implement international harmonization of (perfectly) incompatible standards even if it is efficient. Moreover, even if increasing globalization eventually implements harmonization there are two pitfalls. First, harmonization typically occurs too late from a social point of view. Second, increasing globalization may produce harmonization with an inferior standard. It has also been analyzed how double adoptions or converters may affect these results. We have found that the availability of double adoptions supports harmonization, even if they do not occur in (stable) equilibrium. Nevertheless, even though efficient harmonization is more likely to occur, it still comes with the risk that market-induced harmonization makes populations end up with an inferior standard.