A System Dynamics Model of Standards Competition

Standards competition is a complicated process influenced by a large number of factors and mechanisms. This article develops a simulation model that draws on current theory of standards competition dynamics and represents the interplay of strategic factors that firms can use to gain a competitive advantage. The model is used to reproduce four published cases of standards competition and explore alternative outcomes. Simulation results align with the published cases and show that the competition outcome arises from the systemic effect of all the factors identified in the original studies. Further simulation tests explore under which conditions competition outcomes could have been different. The model, thus, provides a basis for further theoretical and empirical work on strategic aspects of standards competition in the respective industries of the cases.