Economic Background of Car-toCar Communication

The Car-to-Car Communication technology enables vehicles to autonomously exchange data among each other. The main aim is to improve road safety and traffic flow. Unfortunately, the Car-to-Car Communication technology bears direct network effects, i.e. to be able to profit from it, first a certain market penetration is required. Therefore, the mechanisms generally foreseen by car manufacturers to introduce similar functionalities into the market cannot be deployed. This includes that no car manufacturer can gain a competitive edge by pursuing the market by himself.