The Economics Of Technological Clubs

The main goal of the paper is to elaborate a rationale for the membership to technological clubs by analysing the effects on heterogeneous firms of the positive and negative externalities derived from the cooperation. We elaborate thus a simple model of decision making of the extent of technological cooperation, based upon the stylised trade-off between the advantages of reduced costs of innovation and the opportunity costs of the increased price elasticity of lowered demand curves for firms that rely upon different forms of membership to technological clubs. A variant of this trade off is proposed for the case of the network products.