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Firm Heterogeneity and the Pattern of R&D Collaborations

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  • Billand, Pascal
  • Bravard, Christophe
  • Durieu, Jacques
  • Sarangi, Sudipta

Abstract

We consider an oligopoly setting in which firms form pairwise collaborative links in R&D with other firms. Each collaboration generates a value that depends on the identity of the firms that collaborate. First, we provide properties satisfied by pairwise equilibrium networks and efficient networks. Second, we use these properties in two types of situation (1) there are two groups of firms, and the value of a collaboration is higher when firms belong to the same group; (2) some firms have more innovative capabilities than others. These two situations provide clear insights about how firms heterogeneity affects both equilibrium and efficient networks. We also show that the most valuable collaborative links do not always appear in equilibrium, and a public policy that increases the value of the most valuable links may lead to a loss of social welfare.

Suggested Citation

  • Billand, Pascal & Bravard, Christophe & Durieu, Jacques & Sarangi, Sudipta, 2018. "Firm Heterogeneity and the Pattern of R&D Collaborations," MPRA Paper 89247, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:89247
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    References listed on IDEAS

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    1. Pascal Billand & Christophe Bravard & Sudipta Sarangi, 2011. "Strict Nash networks and partner heterogeneity," International Journal of Game Theory, Springer;Game Theory Society, vol. 40(3), pages 515-525, August.
    2. Pascal Billand & Christophe Bravard & Sudipta Sarangi, 2013. "Modeling resource flow asymmetries using condensation networks," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 41(3), pages 537-549, September.
    3. Goyal, Sanjeev & Joshi, Sumit, 2003. "Networks of collaboration in oligopoly," Games and Economic Behavior, Elsevier, vol. 43(1), pages 57-85, April.
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    5. Hagedoorn, John, 2002. "Inter-firm R&D partnerships: an overview of major trends and patterns since 1960," Research Policy, Elsevier, vol. 31(4), pages 477-492, May.
    6. Philipp Marek & Mirko Titze & Clemens Fuhrmeister & Ulrich Blum, 2017. "R&D collaborations and the role of proximity," Regional Studies, Taylor & Francis Journals, vol. 51(12), pages 1761-1773, December.
    7. Pascal Billand & Christophe Bravard & Sudipta Sarangi, 2011. "Resources Flows Asymmetries in Strict Nash Networks with Partner Heterogeneity," Working Papers 1108, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    8. Galeotti, Andrea & Goyal, Sanjeev & Kamphorst, Jurjen, 2006. "Network formation with heterogeneous players," Games and Economic Behavior, Elsevier, vol. 54(2), pages 353-372, February.
    9. 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.
    10. Nicholas Vonortas & Lorenzo Zirulia, 2015. "Strategic technology alliances and networks," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 24(5), pages 490-509, July.
    11. Nicholas S. Vonortas & Koichiro Okamura, 2013. "Network structure and robustness: lessons for research programme design," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 22(4), pages 392-411, June.
    12. 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.
    13. Gomes-Casseres, Benjamin & Hagedoorn, John & Jaffe, Adam B., 2006. "Do alliances promote knowledge flows?," Journal of Financial Economics, Elsevier, vol. 80(1), pages 5-33, April.
    14. 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:

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    2. Battaggion, Maria Rosa & Cerasi, Vittoria, 2020. "Strategic interlocking directorates," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 85-101.

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    More about this item

    Keywords

    Networks; R&D collaborations; link value heterogeneity;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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