Cooperative and Noncooperative R&D in Two-Sided Markets
16 Pages Posted: 27 May 2014
Date Written: May 27, 2014
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: Suggested Citation