| Abstract: | Abstract This paper seeks to understand how the possibility of a complementary relationship or its lack impacts dynamics of competition between two competing network technologies. It examines the cases of gas–electricity and telegraph–telephone competition. The two case studies suggest that the degree of complementarity greatly shapes the dynamics of competition between an entrenched network technology and a new competitor. When there is little scope for a complementary relationship, as in the case of the gas–electricity battle, the strategists for the new technology have to subvert the old system and build a new one on its ashes since there is little chance of coexistence. On the other hand, the possibility of a complementary relationship, as in the case of the telegraph–telephone battle, allows for the emergence of complex situations marked by coexistence interwoven with competition. These compromise positions, invariably involving re‐negotiation of boundaries, are tempting resting spots for battle weary contestants. As the relationship between the old and the new system evolves, the nature of the complementary relationship changes, especially in the relative power of the two systems, and even if eventually the old system fades away the process is a long and gradual one. |
