2002-

The growing strategic and proprietary value of standards has led to problems in standard setting in networked industries. Market failures at the firm level give rise to both collective action and prisoner’s dilemma problems, which are played out and mutually reinforced at the level of standards setting organizations. Intervention at the government level is required to overcome these multiple, and interrelated, failures and dilemmas. The government must help to support the process, thereby reducing collective action problems. Equally important, it must work to eliminate the uncertainties and risks associated with standards bargaining, which typically lead to prisoner’s dilemma outcomes. A major source of such uncertainty is the lack of transparency with respect to property rights and standards.

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