Cooperation Agreement Network

This paper develops a unique framework for analyzing a continuum of hybrid cooperation agreements in two dimensions: their degree of turnover distribution (alliance size) and their degree of cost-sharing (the perimeter of joint ventures). The analysis focuses on the airline industry and distinguishes between the Interline and Interhub markets. As the savings in traffic density are increasing, we see that the socially optimal cooperation agreement is moving from a full alliance to a joint venture in the Interline markets, as it moves from a joint venture to mergers in Interhub markets. These results are driven by the trade-off between the favourable effect of alliances on interline markets and the anti-competitive effect on Interhub markets, as well as the efficiency gains associated with joint ventures in Interhub markets. In addition, we are developing an empirical application for intercontinental routes for the period 2010-2016, which identifies the positive effects of further airline cooperation (revenue and cost sharing) on both interline and interhub Markets traffic. Therefore, the potential anti-competitive effect of deeper alliances in Interhub markets is not observed in our sample. A positive effect of air cooperation on transport is empirically observed. Cooperation is “horizontal” when an agreement is reached between real or potential competitors. In addition, these guidelines also cover horizontal cooperation agreements between non-competitors. B, for example, between two companies that operate in the same product markets but in different geographic markets, without being potential competitors. Horizontal cooperation agreements can generate significant economic benefits, particularly when they combine complementary activities, capabilities or assets.

Horizontal cooperation can be a way to share risk, reduce costs, increase investment, pool know-how, improve product quality and diversity, and accelerate innovation. On the other hand, horizontal cooperation agreements can create competition problems. That is the case, for example. B, where parties agree to set prices or production or share markets, or where cooperation allows the parties to retain, gain or increase market power, which can have negative effects on the market in terms of price, production, product quality, product diversity or innovation.

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