Model of government regulation about the competition of telecommunications standards

It is controversial for Chinese government to regulate the competition in the telecom industry. As the social welfare would decrease if government supports the development of domestic standard through policy instruments, many people are in favor of the rules of free market selection. The reason of government intervention, coincidentally, is that the policy-makers know domestic standard can hardly be chosen because of its immaturity in performance and weak viability in free market. Chinese government is now in a dilemma about improving domestic technology or social welfare. In this paper, a mathematical model is established to analyze the impact on social welfare when government intervenes in the competition among telecommunications standards.