Why are some coalitions more successful than others in setting standards? Empirical evidence from the Blu-ray vs. HD-DVD standard war

Abstract

Standard-setting coalitions are increasingly composed of rival firms from different sectors and are characterized by simultaneous and/or sequential cooperation and competition among their members. This paper examines why firms choose to belong to two standard-setting coalitions instead of one and what determines the success of a standard coalition. We test empirically for network effect, experience effect, and coopetitive effect in the Blu-ray vs. HD-DVD standard war. We find that the higher the similarity of the members in the coalition, the greater the probability of standard coalition success. Furthermore, relatedness leads to a greater probability of joining both competing coalitions, but at a given degree of knowledge difference, an opposite effect exists.Blu-ray; HD-DVD; coalition; coopetition; standard war