The Design of Standardisation Processes in ICT: An evolutionary transaction cost approach

As transaction costs have become an increasing part of the economy''s overall costs, reducing transaction costs has become increasingly important in economic organisation. An example where this is pertinent is the organisation of standardization processes in, notably, Information and Communication Technology industries (ICT). The processes that generate and select standards need to adapt to better solve the trade-off between facilitating innovation and reducing transaction costs. The Internet plays an important role in this regard. This paper explores a dynamic version of transaction cost economics and population ecology to analyze hybrid market / negotiated selection of standards in various ICT cases: Internet browsers, the DVD, IP telephony, handheld computers, and the Linux operating system.