The efficiency and stability of R&D networks

Michael König, Stefano Battiston, Mauro Napoletano and Frank Schweitzer

Games and Economic Behavior, 2012, vol. 75, issue 2, 694-713

Abstract: We investigate the efficiency and stability of R&D networks in a model with network-dependent indirect spillovers. We show that the efficient network structure critically depends on the marginal cost of R&D collaborations. When the marginal cost is low, the complete graph is efficient, while high marginal costs imply that the efficient network is asymmetric and has a nested structure. Regarding the stability of network structures, we show the existence of both symmetric and asymmetric equilibria. The efficient network is stable for small industry size and small cost. In contrast, for large industry size, there is a wide region of cost in which the efficient network is not stable. This implies a divergence between efficiency and stability in large industries.

Keywords: R&D networks; Knowledge recombination; Indirect spillovers; Network efficiency; Network formation (search for similar items in EconPapers)
JEL-codes: D85 L24 O33 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (48)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:75:y:2012:i:2:p:694-713

DOI: 10.1016/j.geb.2011.12.007

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