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RESEARCH PRODUCT

Modelling strategic alliances in the wide-body long range aircraft market

Pietro ZitoMaria BerrittellaVito MandinaLuigi La Franca

subject

Strategy and Managementaircrafts marketTransportationManagement Monitoring Policy and Lawtechnology barriersCompetition (economics)IncentiveRange (aeronautics)BusinessMonopolyLawRivalryStrategic allianceagreementcompetitionIndustrial organizationStrategic financial management

description

Abstract The wide-body long-range aircrafts market is characterized by increasing rivalry between Airbus and Boeing. One of the factors that drive their strategic behaviour is technological. We propose a technology indicator to identify conditions under which the aircraft companies have incentives to join a coalition. For this, we provide measurement of the side-payments necessary to sign a strategic alliance aimed at reducing technological barriers in the market. The results suggest that the existence of side-payments guarantees the stability of a strategic alliance if the gap in the technological level between the firms is high, or competition is through prices. For monopoly, a strategic alliance is profitable, but never stable.

yearjournalcountryeditionlanguage
2007-05-01
10.1016/j.jairtraman.2007.01.003http://hdl.handle.net/10447/3607