Cooperation and Competition in Markets with Network Externalities or Learning Curves

Karl Morasch ()
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Karl Morasch: Universität der Bundeswehr München

A chapter in Interfirm Networks, 2015, pp 299-320 from Springer

Abstract: 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 jointly realize learning curve or network effects and, in some instances, because entry of another firm may be blocked. On the other hand competition between the alliance partners will be intensified. It is shown that the 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 will enhance welfare.

Keywords: Alliances; Network externalities; Learning curve; Oligopoly (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-319-10184-2_15

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DOI: 10.1007/978-3-319-10184-2_15

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