The effect of entry on R&D networks

Emmanuel Petrakis and Nikolas Tsakas

RAND Journal of Economics, 2018, vol. 49, issue 3, 706-750

Abstract: We investigate the effect of potential entry on the formation and stability of R&D networks considering farsighted firms. The presence of a potential entrant often alters the incentives of incumbents to collaborate. Incumbent firms may form an otherwise undesirable collaboration to deter entry of a new firm. Moreover, an incumbent may refrain from establishing an otherwise desirable collaboration, expecting to form a more profitable link with the entrant. Finally, potential entry may lead an inefficient incumbent to exit the market. Welfare analysis shows market and social incentives to be often misaligned. We propose a subsidy scheme that encourages welfare‐improving entry.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://doi.org/10.1111/1756-2171.12250

Related works:
Working Paper: The effect of entry on R&D networks (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:randje:v:49:y:2018:i:3:p:706-750

Ordering information: This journal article can be ordered from
http://www.blackwell ... al.asp?ref=0741-6261

Access Statistics for this article

RAND Journal of Economics is currently edited by James Hosek

More articles in RAND Journal of Economics from RAND Corporation Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().