Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/85753
Authors: 
Goyal, Sanjeev
Moraga, Jose Luis
Year of Publication: 
2000
Series/Report no.: 
Tinbergen Institute Discussion Paper 00-075/1
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.
Subjects: 
strategic alliances
networks
research and development
JEL: 
D21
D43
Document Type: 
Working Paper

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