Cooperation and competition in markets with network externalities or learning curves

Karl Morasch

No 2013,5, Working Papers in Economics from Bundeswehr University Munich, Economic Research Group

Abstract: The related phenomena of learning curve and network effects are quite common in oligopolistic markets. In this context the present paper discusses the incentives of a technological leader to share its exclusive technology with potential competitors. An alliance may be preferable because partner firms may be blocked. On the other hand compeition between the alliance partners will be intensied. It is shown that tha alliance solution will be chosen for medium values of learning curve or network effects. In almost all cases where firms decide to form an alliance this well enhance welfare.

Keywords: Alliances; Network externalities; Learning curve; Oligopoly (search for similar items in EconPapers)
JEL-codes: D43 L13 L15 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-com, nep-cse, nep-ind and nep-net
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ubwwpe:20135

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