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Fits and Misfits: Technological Matching and R&D Networks

Author

Listed:
  • Cowan, Robin

    () (UNU-MERIT, and BETA, Universite Louis Pasteur)

  • Jonard, Nicolas

    () (Universite du Luxembourg.)

  • Sanditov, Bulat

    () (UNU-MERIT, and Maastricht University)

Abstract

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.

Suggested Citation

  • Cowan, Robin & Jonard, Nicolas & Sanditov, Bulat, 2009. "Fits and Misfits: Technological Matching and R&D Networks," MERIT Working Papers 042, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2009042
    as

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    File URL: https://www.merit.unu.edu/publications/wppdf/2009/wp2009-042.pdf
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    References listed on IDEAS

    as
    1. Matthew O. Jackson & Brian W. Rogers, 2005. "The Economics of Small Worlds," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 617-627, 04/05.
    2. Joshi, Sumit, 2008. "Endogenous formation of coalitions in a model of a race," Journal of Economic Behavior & Organization, Elsevier, vol. 65(1), pages 62-85, January.
    3. Carayol, Nicolas & Roux, Pascale, 2009. "Knowledge flows and the geography of networks: A strategic model of small world formation," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 414-427, August.
    4. Goyal, Sanjeev & Joshi, Sumit, 2003. "Networks of collaboration in oligopoly," Games and Economic Behavior, Elsevier, vol. 43(1), pages 57-85, April.
    5. 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.
    6. Francis Bloch, 1995. "Endogenous Structures of Association in Oligopolies," RAND Journal of Economics, The RAND Corporation, vol. 26(3), pages 537-556, Autumn.
    7. Galeotti, Andrea & Goyal, Sanjeev & Kamphorst, Jurjen, 2006. "Network formation with heterogeneous players," Games and Economic Behavior, Elsevier, vol. 54(2), pages 353-372, February.
    8. Mowery, David C. & Oxley, Joanne E. & Silverman, Brian S., 1998. "Technological overlap and interfirm cooperation: implications for the resource-based view of the firm," Research Policy, Elsevier, vol. 27(5), pages 507-523, September.
    9. Sanjeev Goyal & Sumit Joshi, 2006. "Unequal connections," International Journal of Game Theory, Springer;Game Theory Society, vol. 34(3), pages 319-349, October.
    10. Balconi, Margherita & Breschi, Stefano & Lissoni, Francesco, 2004. "Networks of inventors and the role of academia: an exploration of Italian patent data," Research Policy, Elsevier, vol. 33(1), pages 127-145, January.
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    More about this item

    Keywords

    network formation; small worlds; R&D networks; strategic alliances; business clusters;

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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