Research Seminar MicroeconomicsR&D Network Formation with Myopic and Farsighted FirmsVincent Vannetelbosch (U Louvain)
19 October 2017
Vincent Vannetelbosch (U Louvain) 17:15 - 18:45, Room 0029 (VMP 5)
Abstract:
We analyze the formation of bilateral R&D collaborations in an oligopoly when each firm benefits from the research done by other firms she is connected to. Firms can be either myopic or farsighted when deciding about the links they want to form. In case more than half of the firms are farsighted, stability leads to R&D networks consisting of two minimally connected components. Firms in the largest component obtain greater profits. The largest component comprises three-quarters of firms, with farsighted firms occupying central positions and myopic firms being loose-ends or medians. Suppose now that, in addition of myopic and farsighted firms, some firms are a yes-agent. Yes-agents always accept the formation of any link and never delete a link. We show that a yes-agent can help to stabilize some efficient R&D networks by occupying key positions in the networks.