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The evolution of R&D networks

Author

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  • Dawid, Herbert

    (Center for Mathematical Economics, Bielefeld University)

  • Hellmann, Tim

    (Center for Mathematical Economics, Bielefeld University)

Abstract

We study the evolution of R&D networks in a Cournot model where firms may lower marginal costs due to bilateral R&D collaborations. Stochastically stable R&D networks exhibit the dominant group architecture, and, contrary to the existing literature, generically unique predictions about the size of the dominant group can be obtained. This size decreases monotonically with respect to the cost of link formation and there exists a lower bound on the size of the dominant group for non-empty networks. Stochastically stable networks are always inefficient and an increase in linking costs has a non-monotone effect onaverage industry profits.

Suggested Citation

  • Dawid, Herbert & Hellmann, Tim, 2014. "The evolution of R&D networks," Center for Mathematical Economics Working Papers 467, Center for Mathematical Economics, Bielefeld University.
    • Handle: RePEc:bie:wpaper:467
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    References listed on IDEAS

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    15. 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.
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    Cited by:

    1. Ivan Savin, 2021. "On optimal regimes of knowledge exchange: a model of recombinant growth and firm networks," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 16(3), pages 497-527, July.
    2. 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.
    3. Hellmann, Tim & Landwehr, Jakob, 2018. "Pairwise stable networks in homogeneous societies," Center for Mathematical Economics Working Papers 517, Center for Mathematical Economics, Bielefeld University.
    4. Savin, Ivan & Egbetokun, Abiodun, 2016. "Emergence of innovation networks from R&D cooperation with endogenous absorptive capacity," Journal of Economic Dynamics and Control, Elsevier, vol. 64(C), pages 82-103.
    5. Gergely Horvath & Mofei Jia, 2024. "The impact of social status on the formation of collaborative ties and effort provision: An experimental study," Papers 2403.05830, arXiv.org.
    6. Péter Bayer & Ani Guerdjikova, 2020. "Optimism leads to optimality: Ambiguity in network formation," Working Papers hal-03005107, HAL.
    7. Mauleon, Ana & Sempere-Monerris, Jose J. & Vannetelbosch, Vincent, 2023. "R&D network formation with myopic and farsighted firms," Journal of Economic Behavior & Organization, Elsevier, vol. 208(C), pages 203-229.
    8. Mauro Caminati, 2021. "Knowledge distance and R&D collaboration in Cournot oligopoly," Metroeconomica, Wiley Blackwell, vol. 72(1), pages 57-81, February.
    9. Dawid, Herbert & Hellmann, Tim, 2020. "R&D investments under endogenous cluster formation," Journal of Economic Behavior & Organization, Elsevier, vol. 174(C), pages 253-283.
    10. Hellmann, Tim & Staudigl, Mathias, 2014. "Evolution of social networks," European Journal of Operational Research, Elsevier, vol. 234(3), pages 583-596.
    11. Jonathan Newton, 2018. "Evolutionary Game Theory: A Renaissance," Games, MDPI, vol. 9(2), pages 1-67, May.
    12. Sonja Brangewitz & Claus-Jochen Haake & Philipp Moehlmeier, 2015. "Strategic Formation of Customer Relationship Networks," Working Papers CIE 91, Paderborn University, CIE Center for International Economics.
    13. Mauleon, Ana & Nanumyan, Mariam & Vannetelbosch, Vincent, 2024. "Ideal efforts and consensus in a multi-layer network game," LIDAM Discussion Papers CORE 2024023, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    14. Qiang Gong & Huanxing Yang, 2020. "Collaborative Networks in Oligopoly with Asymmetric Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 56(2), pages 357-380, March.
    15. Sawa, Ryoji, 2021. "A stochastic stability analysis with observation errors in normal form games," Games and Economic Behavior, Elsevier, vol. 129(C), pages 570-589.
    16. 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.
    17. Lorenzo Zirulia, 2023. "Path dependence in evolving R&D networks," Journal of Evolutionary Economics, Springer, vol. 33(1), pages 149-177, January.
    18. König, Michael D. & Rogers, Tim, 2023. "Endogenous technology cycles in dynamic R&D networks," European Economic Review, Elsevier, vol. 158(C).
    19. César García-Díaz & Gábor Péli & Arjen van Witteloostuijn, 2020. "The coevolution of the firm and the product attribute space," PLOS ONE, Public Library of Science, vol. 15(6), pages 1-25, June.
    20. Chen, Shangrong & Bravo-Melgarejo, Sai & Mongeau, Romain & Malavolti, Estelle, 2023. "Adopting and diffusing hydrogen technology in air transport: An evolutionary game theory approach," Energy Economics, Elsevier, vol. 125(C).
    21. Malcolm Brady, 2021. "A Game-Theoretic Model of Strategic Interaction Using Advertising: Simulating the Evolution of the Cournot Nash Equilibrium under Different Competitive Scenarios," Games, MDPI, vol. 12(4), pages 1-16, November.

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    More about this item

    Keywords

    R&D Networks; Stochastic Stability; Oligopoly;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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