R&D networks

Sanjeev Goyal*, José Luis Moraga-González

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

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.

Original languageEnglish
Pages (from-to)686-707
Number of pages22
JournalRand Journal of Economics
Volume32
Issue number4
DOIs
Publication statusPublished - Dec 2001

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