A Review of Standardization and Compatibility Theory: Insights, Challenges, and Future Directions

Abstract

This paper offers a comprehensive review of standardization and compatibility theory, examining its conceptual foundations, empirical applications, and theoretical implications in various domains. Standardization and compatibility are fundamental concepts in economics, management, engineering, and information technology, with broad-ranging implications for market dynamics, innovation, and technology adoption. Drawing upon interdisciplinary perspectives, this review synthesizes key theoretical frameworks, including network effects, lock-in phenomena, and path dependence, to elucidate the mechanisms through which standardization and compatibility shape market structure, firm strategy, and consumer behavior. The paper also discusses empirical evidence from diverse industries, such as telecommunications, software, and consumer electronics, highlighting the role of standards-setting organizations, regulatory regimes, and strategic alliances in shaping standardization outcomes. Furthermore, the review explores emerging challenges and debates surrounding standardization, such as interoperability, intellectual property rights, and platform competition, and discusses avenues for future research, including the study of standards evolution, hybrid standards, and the role of emerging technologies like blockchain and artificial intelligence. By providing a comprehensive overview of standardization and compatibility theory, this review aims to inform scholars, practitioners, and policymakers about the complexities and opportunities inherent in standardization processes, and to stimulate further research on this vital topic in the context of evolving technological landscapes and global markets.