Converters, Compatibility, and the Control of Interfaces

Abstract

Converters, emulators, or adapters can often make one technology partially compatible with another.We analyze the equilibrium market adoption of otherwise incompatible technologies, when such converters are available, and the incentives to provide them.While market outcomes without converters are often inefficient, we find that, in plausible cases, the availability of converters can actually make matters worse.We also find that when one of the technologies is supplied only by a single firm, that firm may have an incentive to make conversion costly.This may lend some theoretical support to allegations of anticompetitive disruption of interface standards.