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Keystone Players and Complementors: An Innovation Perspective

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  • Frédéric Marty
  • Thierry Warin

Abstract

In this article, we investigate the role of keystone players and consider their impact in terms of innovation rate in an industry. To do so, we build a theoretical framework that considers the innovation rate in the context of an industry with one keystone player and then with multiple keystone players. The results are threefold. First, the presence of a keystone player is incredibly important for innovation on a market. Second, however, our results also show that a biased market power in favor of the keystone player may hinder innovation in this industry, although the negative impact on the industry’s innovation rate may not be seen at first. Finally, we demonstrate that an industry obtains a higher innovation rate with multiple keystone players. This framework could inform decisions for the antitrust enforcers.

Suggested Citation

  • Frédéric Marty & Thierry Warin, 2020. "Keystone Players and Complementors: An Innovation Perspective," CIRANO Working Papers 2020s-61, CIRANO.
  • Handle: RePEc:cir:cirwor:2020s-61
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    References listed on IDEAS

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    1. Jean-Luc Gaffard & Michel Quéré, 2007. "What’s the aim for competition policy: Optimizing market structure or encouraging innovative behaviors?," Springer Books, in: Uwe Cantner & Franco Malerba (ed.), Innovation, Industrial Dynamics and Structural Transformation, pages 393-405, Springer.
    2. Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: an Inverted-U Relationship," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 701-728.
    3. Thierry Warin & Daniel Leiter, 2012. "Homogenous goods markets: an empirical study of price dispersion on the internet," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(5), pages 514-529.
    4. Frédéric Marty & Julien Pillot, 2012. "Intellectual Property Rights, Interoperability and Compulsory Licensing: Merits and Limits of the European approach," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 35-61.
    5. Frédéric Marty & Thierry Warin, 2020. "Concurrence et innovation dans les écosystèmes numériques à l’ère de l’intelligence artificielle," Post-Print halshs-02480762, HAL.
    6. Feng Zhu & Qihong Liu, 2018. "Competing with complementors: An empirical look at Amazon.com," Strategic Management Journal, Wiley Blackwell, vol. 39(10), pages 2618-2642, October.
    7. Josef Drexl, 2012. "Anticompetitive Stumbling Stones On The Way To A Cleaner World: Protecting Competition In Innovation Without A Market," Journal of Competition Law and Economics, Oxford University Press, vol. 8(3), pages 507-542.
    8. Patrice Bougette & Oliver Budzinski & Frédéric Marty, 2019. "Exploitative Abuse and Abuse of Economic Dependence: What Can We Learn From an Industrial Organization Approach?," Revue d'économie politique, Dalloz, vol. 129(2), pages 261-286.
    9. Sai Lan & Kun Liu & Yidi Dong, 2019. "Dancing with wolves: how value creation and value capture dynamics affect complementor participation in industry platforms," Industry and Innovation, Taylor & Francis Journals, vol. 26(8), pages 943-963, September.
    10. Wen Wen & Feng Zhu, 2019. "Threat of platform‐owner entry and complementor responses: Evidence from the mobile app market," Strategic Management Journal, Wiley Blackwell, vol. 40(9), pages 1336-1367, September.
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    Cited by:

    1. Frédéric Marty, 2021. "The concentration of digital markets: How to preserve the conditions for effective and undistorted competition?," CIRANO Working Papers 2021s-27, CIRANO.

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    More about this item

    Keywords

    Innovation; Coopetition; Technological Dependence; Dominant Position; Keystone Players; Platform;
    All these keywords.

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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