What is the postive role of standards in the economic activity?
What is the negative role of standards in the economic activity?
Define standard
Standard is “…a construct that results from reasoned, collective choice and enables agreement on solutions of recurrent problems…a set of specifications to which all elements of products, processes, formats or procedures under its jurisdiction must conform.”
Definie standardization
What are drawbacks (Nachteile) of standards?
In the example of the service sectors, what led to a rejection of standards? What led to the ISO 9000?
Problems related to the formalization of services (high degree of individualization, recent trend of mass-customization) and associated technocratic paradigm lead to reluctance to standardize.
BUT:
Higher need for services due to decreasing labor intensity, decreasing customization, lower direct customer interaction
ISO 9000 series: quality standards -> innovative service companie
How do you calculate the critical mass on joining an economic unit in the technolog T with network externalities? And what is the ciritical mass mass after the transition to new technology?
Which classifications of standards exists?
What functions do standards have?
What do we mean by „systemic character (aspects) of standards“?
What does “positive feedback on the demand side” mean? What is the difference between the terms „positive feedback“, „increasing returns on adoption“ and „network externalities/effects“?
What approaches for firms exists to choose productive technologies?
Explain the process of the static approach.
Technology-adoption game
NASH-Equilibria (Options)
(Old, Old) played BUT
(New, New) pareto dominates -> excess inertia
Economy is locked in with an inferior technology
Because users have to bear the costs
(New, New): played BUT
(Old, Old): Pareto dominate-> excess momentum
Because consumer rush to adopt an inferior technology
Costs bear by the users who stick to old technology
When and why are we often locked in with an inferior technology?
Excess inertia
users delay adopting a new technology ((OLD,OLD) is the played Nash equilibrium but the outcome (NEW,NEW) is characterized by higher utility). It describes the situation in which the economy is locked in with an inferior technology. This situation arises when the new users have to bear the costs of innovating (because of the presence of positive externalities).
Show the Nash Equilibria for
an excess inertia
an excess momentum
excess inertia
excess momentum
Explain the process of the dynamic approach.
Focus on factors affecting timing and frequency of adoption
Consumer: substitution between more advanced tech. & network size
Techn. growth rate & consumer population size
degree of compatible: old & new tech.
example: chip industrie
adapting:
young consumers
gain utility from first consumption
When competing technologies are in the market, which scenarios can occur?
Technological Monopolies vs. Market sharing
What are the dynamics of adoption of different technologies competing for the same market niche?
Answer relies on POSITIVE FEEDBACKS on the DEMAND SIDE.
= network externalities/effects
How does the standard class of models explains the dynamics of adoption of competing technologies?
How does the Bassanini and Dosi explain the dynamics of adoption of competing technologies? Give an example.
Explain the effect of positive feedback on the adoption and give an example
Which government incentives exists to recognize foreign standards in the presence of international network effects?
Give two expamples for effects of specific types of standards on trade.
Effect of compatibility standards on international trade
allow capturing international network externalities or coordinate activities in a more efficient way
Effects on safety standards on international trade
not design with the purpose of acting as a protectionsim device
consumers’ williningess to pay (WTP) for safer products
Effect of environment-related standards
Explain the Effects of specific types of standards on trade
Explain the Effect of environment-related standards on trade
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