Cowan, Robin () (UNU-MERIT, and BETA, Universite Louis Pasteur) Jonard, Nicolas () (Universite du Luxembourg.) Sanditov, Bulat () (UNU-MERIT, and Maastricht University)
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This paper presents an economic model of R&D network formation through the creation of strategic alliances. Firms are randomly endowed with knowledge elements. They base their alliance decisions purely on the technological fit of potential partners, ignoring social capital considerations and indirect benefits on the network. This is sufficient to generate equilibrium networks with the small world properties of observed alliance networks, namely short pairwise distances and local clustering. The equilibrium networks are more clustered than "comparable" random graphs, while they have similar characteristic path length. Two extreme regimes of competition are examined, to show that while the competition has a quantitative effect on the equilibrium networks (density is lower with competition), the small world features of the equilibrium networks are preserved.
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Paper provided by United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology in its series UNU-MERIT Working Paper Series with number
042.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Jackson, Matthew O. & Rogers, Brian W., 2005.
"The economics of small worlds,"
Working Papers
1214, California Institute of Technology, Division of the Humanities and Social Sciences.
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Sanjeev Goyal & Marco J. van der Leij & José Luis Moraga-Gonzalez, 2006.
"Economics: An Emerging Small World,"
Journal of Political Economy,
University of Chicago Press, vol. 114(2), pages 403-432, April.
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