The Rules of Standard Setting Organizations: An Empirical Analysis

Posted: 1 Dec 2009

See all articles by Benjamin Chiao

Benjamin Chiao

PSB Paris School of Business; Southwestern University of Finance and Economics

Josh Lerner

Harvard Business School - Finance Unit; Harvard University - Entrepreneurial Management Unit; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Private Capital Research Institute

Jean Tirole

University of Toulouse 1 - Industrial Economic Institute (IDEI); University of Toulouse 1 - Groupe de Recherche en Economie Mathématique et Quantitative (GREMAQ); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 4 versions of this paper

Date Written: 2005

Abstract

Standard-setting organizations (SSOs) have gained increasingly important roles in determining and maintaining technological standards over the last twenty years. The relationship between the characteristics of SSOs and the rules that they enforce to license and disclose intellectual property are examined. First, two theories from Lerner-Triole (2004) are tested: (1) there is a negative correlation between the concession level of technology sponsors and the extent of the orientation of an SSO to them, and (2) the sponsor-friendliness of an SSO is positively related to the quality of a standard. It is hypothesized that a higher licensing price is associated with more disclosure within equilibrium, and settings with limited numbers of SSOs allow them to have greater control over technology sponsors. A database of 60 groups was established in 2003. Data were gathered from websites of SSOs, records of standards bodies, and information from surveys and interviews. Statistical analysis of the data revealed that the findings were consistent with both the propositions in this investigation and in Lerner-Triole (2004). Disclosure requirements are negatively related to policies requiring royalty-free licensing, whereas a positive relationship is found with policies with more reasonable licensing terms. Also, the connection between concessions and user-friendliness is not valid when only small numbers of SSOs are present. (SRY)

Keywords: Experimental/primary research, Invention disclosures, Intellectual property, Patents, Production standards, License agreements, Licensing strategies

Suggested Citation

Chiao, Benjamin and Lerner, Josh and Tirole, Jean, The Rules of Standard Setting Organizations: An Empirical Analysis (2005). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1513805

Benjamin Chiao (Contact Author)

PSB Paris School of Business ( email )

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Southwestern University of Finance and Economics ( email )

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Josh Lerner

Harvard Business School - Finance Unit ( email )

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Harvard University - Entrepreneurial Management Unit

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Jean Tirole

University of Toulouse 1 - Industrial Economic Institute (IDEI) ( email )

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Toulouse, 31000
France

Centre for Economic Policy Research (CEPR)

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United Kingdom

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