IDEAS home Printed from https://ideas.repec.org/p/cor/louvco/2009068.html
   My bibliography  Save this paper

Endogenous network formation in patent contests and its role as a barrier to entry

Author

Listed:
  • MARINUCCI, Marco

    (Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium)

  • VERGOTE, Wouter

    (Facultés universitaires Saint-Louis, CEREC, B-1000 Bruxelles, Belgium and Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium)

Abstract

In a setting of R&D co-opetition we study, by using an all-pay auction approach, how collaboration affects strategic decisions during a patent contest, and how the latter influences the possible collaboration network structures the firms can hope to form. The all pay auction approach allows us to 1) endogenize both network formation and R&D intensities and 2) take heterogeneous and private valuations for patents into account. We find that, different from previous literature, the complete network is not always the only pairwise stable network, even and especially if the benefits from cooperating are important. Interestingly, the other possible stable networks all have the realistic property that some firms decide not to participate in the contest. Thus, weak cooperation through network formation can serve as a barrier to entry on the market for innovation. We further show that there need not be any network that survives a well known refinement of pairwise stability, strong stability, which imposes networks to be immune to coalitional deviations.

Suggested Citation

  • MARINUCCI, Marco & VERGOTE, Wouter, 2009. "Endogenous network formation in patent contests and its role as a barrier to entry," LIDAM Discussion Papers CORE 2009068, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2009068
    as

    Download full text from publisher

    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp2009.html
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Emmanuel Petrakis & Nikolas Tsakas, 2018. "The effect of entry on R&D networks," RAND Journal of Economics, RAND Corporation, vol. 49(3), pages 706-750, September.
    2. Daniel G. Stephenson & Alexander L. Brown, 2021. "Playing the field in all-pay auctions," Experimental Economics, Springer;Economic Science Association, vol. 24(2), pages 489-514, June.
    3. Grandjean, G. & Tellone, D. & Vergote, W., 2016. "Cooperation, Competition and Entry in a Tullock Contest," LIDAM Discussion Papers CORE 2016032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Miettinen, Topi & Poutvaara, Panu, 2014. "A market for connections," European Journal of Political Economy, Elsevier, vol. 33(C), pages 37-52.
    5. Grandjean, G. & Tellone, D. & Vergote, W., 2017. "Endogenous network formation in a Tullock contest," Mathematical Social Sciences, Elsevier, vol. 85(C), pages 1-10.
    6. Dawid, Herbert & Hellmann, Tim, 2016. "R&D Investments under Endogenous Cluster Formation," Center for Mathematical Economics Working Papers 555, Center for Mathematical Economics, Bielefeld University.
    7. Roketskiy, Nikita, 2018. "Competition and networks of collaboration," Theoretical Economics, Econometric Society, vol. 13(3), September.
    8. Alexander Matros & David Michael Rietzke, 2017. "Contests on Networks," Working Papers 156630581, Lancaster University Management School, Economics Department.

    More about this item

    Keywords

    patent game; networks; R&D cooperation; all-pay auction;
    All these keywords.

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cor:louvco:2009068. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alain GILLIS (email available below). General contact details of provider: https://edirc.repec.org/data/coreebe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.