Cooperative and Noncooperative R&D in Two-Sided Markets

16 Pages Posted: 27 May 2014

See all articles by Marc Bourreau

Marc Bourreau

Telecom ParisTech

Marianne Verdier

Université Paris 2 Panthéon Assas

Date Written: May 27, 2014

Abstract

In this paper, we analyze the impact of cooperation on R&D investments in a two-sided market, where platforms compete in quantities. We show that if indirect externalities are of a moderate magnitude, the threshold degree of spillovers above which cooperation spurs R&D investments and enhances social welfare increases with the degree of externalities. If indirect externalities are of a strong magnitude, cooperation can also be beneficial in terms of welfare for low degrees of spillovers.

Keywords: R&D Cooperation, Spillovers, Two-Sided Markets

JEL Classification: L1, O31, E42

Suggested Citation

Bourreau, Marc and Verdier, Marianne, Cooperative and Noncooperative R&D in Two-Sided Markets (May 27, 2014). Available at SSRN: https://ssrn.com/abstract=2442166 or http://dx.doi.org/10.2139/ssrn.2442166

Marc Bourreau (Contact Author)

Telecom ParisTech ( email )

46, rue Barrault
Paris Cedex 13, F-75634
France

Marianne Verdier

Université Paris 2 Panthéon Assas ( email )

France

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