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Natural concentration in industrial research collaboration

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  • Bastian Westbrock

Abstract

Empirical work shows that networks of research and development alliances are asymmetric, with a small number of firms involved in the majority of partnerships. This article investigates the welfare-relevant effects of such concentrated networks in a model of network formation in an oligopolistic market. We find that concentration is a typical characteristic of a socially efficient network when the costs of collaborative activity are significant. Moreover, expanding on prior work relating to strategically stable interfirm networks, we compare the stable and the efficient structures. Our findings suggest that real-world networks might even exhibit too little concentration. Copyright (c) 2010, RAND.

Suggested Citation

  • Bastian Westbrock, 2010. "Natural concentration in industrial research collaboration," RAND Journal of Economics, RAND Corporation, vol. 41(2), pages 351-371.
  • Handle: RePEc:bla:randje:v:41:y:2010:i:2:p:351-371
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    References listed on IDEAS

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    Cited by:

    1. Dawid, Herbert & Hellmann, Tim, 2014. "The evolution of R&D networks," Journal of Economic Behavior & Organization, Elsevier, vol. 105(C), pages 158-172.
    2. Pascal Billand & Christophe Bravard & Subhadip Chakrabarti & Sudipta Sarangi, 2014. "A note on networks of collaboration in multi-market oligopolies," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(2), pages 325-335, September.
    3. König, Michael & Liu, Xiaodong & Zenou, Yves, 2014. "R&D Networks: Theory, Empirics and Policy Implications," CEPR Discussion Papers 9872, C.E.P.R. Discussion Papers.
    4. Olaizola Ortega, María Norma & Valenciano Llovera, Federico, 2017. "Efficiency of weighted networks," IKERLANAK Ikerlanak;2017-104, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
    5. Grandjean, G. & Tellone, D. & Vergote, W., 2016. "Cooperation, Competition and Entry in a Tullock Contest," CORE Discussion Papers 2016032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    6. Jackson, Matthew O. & Zenou, Yves, 2015. "Games on Networks," Handbook of Game Theory with Economic Applications, Elsevier.
    7. Belhaj, Mohamed & Bervoets, Sebatian & Deroïan, Frédéric, 2016. "Efficient networks in games with local complementarities," Theoretical Economics, Econometric Society, vol. 11(1), January.
    8. Billand, Pascal & Bravard, Christophe & Durieu, Jacques & Sarangi, Sudipta, 2015. "Efficient networks for a class of games with global spillovers," Journal of Mathematical Economics, Elsevier, vol. 61(C), pages 203-210.
    9. 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.
    10. repec:eee:jeborg:v:145:y:2018:i:c:p:424-434 is not listed on IDEAS
    11. Pascal Billand & Christophe Bravard & Subhadip Chakrabarti & Sudipta Sarangi, 2013. "Abram Bergson," Working Papers 1339, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    12. Mario V. Tomasello & Mauro Napoletano & Antonios Garas & Frank Schweitzer, 2017. "The rise and fall of R&D networks," Industrial and Corporate Change, Oxford University Press, vol. 26(4), pages 617-646.
    13. Ushchev, Philip & Zenou, Yves, 2015. "Price Competition in Product Variety Networks," CEPR Discussion Papers 10862, C.E.P.R. Discussion Papers.
    14. Billand, P. & Bravard, C. & Chakrabarti, S. & Sarangi, S., 2013. "A note on networks collaboration in multi-market oligopolies," Working Papers 2013-05, Grenoble Applied Economics Laboratory (GAEL).
    15. König, Michael David, 2016. "The formation of networks with local spillovers and limited observability," Theoretical Economics, Econometric Society, vol. 11(3), September.
    16. König, Michael D. & Battiston, Stefano & Napoletano, Mauro & Schweitzer, Frank, 2012. "The efficiency and stability of R&D networks," Games and Economic Behavior, Elsevier, vol. 75(2), pages 694-713.
    17. Mauro Caminati, 2012. "Self sustaining R&D networks," Department of Economics University of Siena 653, Department of Economics, University of Siena.
    18. repec:zur:econwp:142 is not listed on IDEAS
    19. Zilibotti, Fabrizio & König, Michael & Lorenz, Jan, 2016. "Innovation vs. imitation and the evolution of productivity distributions," Theoretical Economics, Econometric Society, vol. 11(3), September.
    20. Stuart McDonald & Mohamad Alghamdi & Bernard Pailthorpe, 2012. "The Emergence of a Small World in a Network of Research Joint Ventures," Discussion Papers Series 469, School of Economics, University of Queensland, Australia.
    21. repec:spo:wpecon:info:hdl:2441/f6h8764enu2lskk9p5487a6cm is not listed on IDEAS
    22. Grandjean, G. & Tellone, D. & Vergote, W., 2017. "Endogenous network formation in a Tullock contest," Mathematical Social Sciences, Elsevier, vol. 85(C), pages 1-10.
    23. Kesavayuth, Dusanee & Zikos, Vasileios, 2012. "Upstream and downstream horizontal R&D networks," Economic Modelling, Elsevier, vol. 29(3), pages 742-750.

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