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An Optimal Partnership Search Model: Theoretical Implications for the Europartenariat Event

  • R. Bernardini Papalia
  • S. Bertarelli
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    A theoretical search model applied to collaboration among firms with a public authority as an intermediate is the primary issue of this paper. Specifically, we consider the Europartenariat event since it represents a good opportunity to study a problem of interaction between the decision to search a collaboration and the exchange of information involved in a bargaining process. Search costs play a central role in this framework. We show the optimality of a strategy as to the number of contacts with host companies in a problem of dynamic programming. Precisely, solutions in a search model with the presence of fixed and quadratic costs are derived in terms of an optimal threshold number of contacts and of an optimal interval of the number of contacts, respectively. For the case of fixed costs, we find that the minimum number of contacts for which the firm accepts to participate is negatively related to the expected profit and to the probability of contacting one firm with a common project of collaboration. This is confirmed by a simulation. In the quadratic cost hypothesis we investigate learning phenomena and revelation of private information.

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    Paper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number 310.

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    Date of creation: Apr 1998
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    Handle: RePEc:bol:bodewp:310
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    1. Peter A. Diamond, 1982. "Wage Determination and Efficiency in Search Equilibrium," Review of Economic Studies, Oxford University Press, vol. 49(2), pages 217-227.
    2. Stiglitz, J E, 1979. "Equilibrium in Product Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 69(2), pages 339-45, May.
    3. Lancaster, Tony & Chesher, Andrew, 1983. "An Econometric Analysis of Reservation Wages," Econometrica, Econometric Society, vol. 51(6), pages 1661-76, November.
    4. Lucas, Robert Jr. & Prescott, Edward C., 1974. "Equilibrium search and unemployment," Journal of Economic Theory, Elsevier, vol. 7(2), pages 188-209, February.
    5. Christensen, Bent Jesper & Kiefer, Nicholas M., 1991. "The Exact Likelihood Function for an Empirical Job Search Model," Econometric Theory, Cambridge University Press, vol. 7(04), pages 464-486, December.
    6. Stiglitz, Joseph E, 1987. "Competition and the Number of Firms in a Market: Are Duopolies More Competitive than Atomistic Markets?," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 1041-61, October.
    7. Peter Howitt, 1988. "Business Cycles With Costly Search and Recruiting," The Quarterly Journal of Economics, Oxford University Press, vol. 103(1), pages 147-165.
    8. Binmore, Ken & Osborne, Martin J. & Rubinstein, Ariel, 1992. "Noncooperative models of bargaining," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 7, pages 179-225 Elsevier.
    9. Masahiro Okuno-Fujiwara & Andrew Postlewaite & Kotaro Suzumura, 1990. "Strategic Information Revelation," Review of Economic Studies, Oxford University Press, vol. 57(1), pages 25-47.
    10. P. Diamond, 1980. "Mobility Costs, Frictional Unemployment and Efficiency," Working papers 257, Massachusetts Institute of Technology (MIT), Department of Economics.
    11. Schrader, Stephan, 1991. "Informal technology transfer between firms: Cooperation through information trading," Research Policy, Elsevier, vol. 20(2), pages 153-170, April.
    12. McKenna, Christopher J, 1986. "Theories of Individual Search Behaviour," Bulletin of Economic Research, Wiley Blackwell, vol. 38(3), pages 189-207, September.
    13. Pissarides, Christopher A, 1985. "Short-run Equilibrium Dynamics of Unemployment Vacancies, and Real Wages," American Economic Review, American Economic Association, vol. 75(4), pages 676-90, September.
    14. Dale T. Mortensen, 1979. "The Matching Process as a Non-Cooperative/Bargaining Game," Discussion Papers 384, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    15. Gal-Or, Esther, 1985. "Information Sharing in Oligopoly," Econometrica, Econometric Society, vol. 53(2), pages 329-43, March.
    16. Vives, Xavier, 1984. "Duopoly information equilibrium: Cournot and bertrand," Journal of Economic Theory, Elsevier, vol. 34(1), pages 71-94, October.
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