Rapid Technical Change and the Speed of Lock-in: Standard Battles in the Local Area Network Industry in the 1990s

The rise of Fast Ethernet as the dominant standard for high speed connection in the Local Area Network industry is chosen to analyse the relevance of increasing returns and network externalities in determining the speed of standard diffusion. Although it was not the first standard to emerge, Fast Ethernet was able to catch up an out-compete existing alternatives due its ability to target different user needs and penetrate new market niches. In the presence of rapid technological change, even though a technology enjoys a head start over competing alternatives, achieving lock-in may be more difficult than the theory on increasing returns and network externalities generally predicts.