The Role of Public Entity in Coopetiotion and Convergence

Abstract

We investigate upon the strategic impact of the public entity to catalyze coalition formation among competitors around an essential facility. The public entity is usually represented as if moved by mere political scopes. However, the presence of a publicly-owned asset or infrastructure, which can be termed an essential facility, gives leeway to shed the opportunity to satisfy potentially new and different type of demand or consumer cluster needs. The increase in value stemming from a renewal in the utilization of the facility might loosen up political restraints against the involvement in the management of the facility of a multiplicity of actors. This allows us to add a new dimension to the role of the public entity, that is as a catalyst in coalition formation among perspective private co-opetitors, or might even let us present a rationale for the (partial) privatization. If the public retains management and/or in the property of the facility, we show how it influences the dynamics in the industry.