Economic Experiments and the Development of Wi-Fi

Abstract

Purpose – What role did economic experiments play in creating value in the commercial market for wireless Internet access? Rosenberg (1992, p. 181) defines such experiments broadly, “to include experimentation with new forms of economic organization as well as the better-known historical experiments that have been responsible for new products and new manufacturing technologies.”

Design/methodology/approach – The chapter provides an overview of the experience of a number of firms, focusing on the period between the late 1990s and early part of the 21st century, when the technology first blossomed in commercial markets. The chapter uses the experience of Lucent and Intel as primary illustrations of key concepts, and the chapter discusses how the framework generalizes beyond the experience of these two firms.

Findings – The distinction between directed and undirected experiments helps understand events in the evolution of Wi-Fi's value. They also bring new perspective to an extensive debate in communications policy about the best way to assign and allocate spectrum, focusing on the importance of the regulatory decision to provide space in which experiments can take place.

Originality/value – This framework has value for business history of the commercial Internet. This lens stresses the importance of preserving discretion to move business away from applications with low value, namely, away from allocations that used a conceptualization of the technology founded on a poor-use case, which later lessons showed had lower value than alternatives.

Citation

Greenstein, S. (2012), "Economic Experiments and the Development of Wi-Fi", Kahl, S.J., Silverman, B.S. and Cusumano, M.A. (Ed.) History and Strategy (Advances in Strategic Management, Vol. 29), Emerald Group Publishing Limited, Leeds, pp. 3-33. https://doi.org/10.1108/S0742-3322(2012)0000029005