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R&D Networks

Author

Listed:
  • Sanjeev Goyal

    () (Erasmus University Rotterdam)

  • Jose Luis Moraga

    () (Groningen University)

Abstract

We develop a model of strategic networks that captures two distinctive features of interfirm collaboration: bilateral agreements and nonexclusive relationships. Our analysis highlights the relationship between market competition, firms' incentives to invest in R&D, and the architecture of collaboration networks. In the absence of firm rivalry, the complete network, where each firm collaborates with all others, is uniquely stable, industry-profit maximizing, and efficient. By contrast, under strong market rivalry the complete network is stable, but intermediate levels of collaboration and asymmetric networks are more attractive from a collective viewpoint. This suggests that competing firms may have excessive incentives to form collaborative links. This discussion paper has resulted in a publication in The Rand Journal of Economics , 2001, 32(4), 686-707.

Suggested Citation

  • Sanjeev Goyal & Jose Luis Moraga, 2000. "R&D Networks," Tinbergen Institute Discussion Papers 00-075/1, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20000075
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    Cited by:

    1. Itay P. Fainmesser, 2012. "Community Structure and Market Outcomes: A Repeated Games-in-Networks Approach," American Economic Journal: Microeconomics, American Economic Association, vol. 4(1), pages 32-69, February.
    2. Sergio Currarini & Carmen Marchiori & Alessandro Tavoni, 2016. "Network Economics and the Environment: Insights and Perspectives," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 159-189, September.
    3. Coralio Ballester & Antoni Calvó-Armengol & Yves Zenou, 2006. "Who's Who in Networks. Wanted: The Key Player," Econometrica, Econometric Society, vol. 74(5), pages 1403-1417, September.
    4. Mauro Napoletano & Stefano Battiston & Michael König & Frank Schweitzer, 2008. "The efficiency and evolution of R&D Networks," Sciences Po publications 2008-31, Sciences Po.
    5. Gary H. Jefferson & Zhong Kaifeng, 2002. "An Investigation of Firm-Level R&D Capabilities in East Asia," William Davidson Institute Working Papers Series 583, William Davidson Institute at the University of Michigan.
    6. Rodrigo J. Harrison & Roberto Munoz, 2003. "Stability and Equilibrium Selection in a Link Formation Game," Game Theory and Information 0306004, University Library of Munich, Germany.
    7. Mauleon, Ana & Sempere-Monerris, Jose J. & Vannetelbosch, Vincent J., 2011. "Networks of manufacturers and retailers," Journal of Economic Behavior & Organization, Elsevier, vol. 77(3), pages 351-367, March.
    8. Dutta, Bhaskar & Ghosal, Sayantan & Ray, Debraj, 2005. "Farsighted network formation," Journal of Economic Theory, Elsevier, vol. 122(2), pages 143-164, June.
    9. Lorenzo Zirulia, 2005. "R&D Networks with Heterogenous Firms," KITeS Working Papers 167, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised May 2005.
    10. Albert Banal & Ines Macho-Stadler & Jo Seldeslachts, 2003. "Mergers, Investment Decisions and Internal Organisation," UFAE and IAE Working Papers 569.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    11. Huasheng Song & Vincent Vannetelbosch, 2007. "International R&D Collaboration Networks," Manchester School, University of Manchester, vol. 75(6), pages 742-766, December.
    12. Michael Kosfeld, "undated". "Network Experiments," IEW - Working Papers 152, Institute for Empirical Research in Economics - University of Zurich.
    13. Bloch, Francis & Dutta, Bhaskar, 2009. "Communication networks with endogenous link strength," Games and Economic Behavior, Elsevier, vol. 66(1), pages 39-56, May.
    14. Mohammad Arzaghi & J. Vernon Henderson, 2008. "Networking off Madison Avenue," Review of Economic Studies, Oxford University Press, vol. 75(4), pages 1011-1038.
    15. Andrea Galeotti & Sanjeev Goyal & Matthew O. Jackson & Fernando Vega-Redondo & Leeat Yariv, 2010. "Network Games," Review of Economic Studies, Oxford University Press, vol. 77(1), pages 218-244.
    16. Aydogan, Neslihan & Lyon, Thomas P., 2004. "Spatial proximity and complementarities in the trading of tacit knowledge," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1115-1135, November.
    17. MAULEON, Ana & SEMPERE-MONERRIS, José & VANNETELBOSCH, Vincent J., 2004. "R&D networks among unionized firms," CORE Discussion Papers 2004071, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

    More about this item

    Keywords

    strategic alliances; networks; research and development;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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