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Local contraction-stability and uniqueness


Hefti, Andreas (2013). Local contraction-stability and uniqueness. Working paper series / Department of Economics 112, University of Zurich.

Abstract

In this paper we analyze R&D collaboration networks in industries where firms are competitors in the product market. Firms’ benefits from collaborations arise by sharing knowledge about a cost-reducing technology. By forming collaborations, however, firms also change their own competitive position in the market as well as the overall market structure. We analyze incentives of firms to form R&D collaborations with other firms and the implications of these alliance decisions for the overall network structure. We provide a general characterization of both equilibrium networks and endogenous production choices, and compare it to the efficient network architecture. We also allow for firms to differ in their technological characteristics, investigate how this affects their propensity to collaborate and study the resulting network architecture.

Abstract

In this paper we analyze R&D collaboration networks in industries where firms are competitors in the product market. Firms’ benefits from collaborations arise by sharing knowledge about a cost-reducing technology. By forming collaborations, however, firms also change their own competitive position in the market as well as the overall market structure. We analyze incentives of firms to form R&D collaborations with other firms and the implications of these alliance decisions for the overall network structure. We provide a general characterization of both equilibrium networks and endogenous production choices, and compare it to the efficient network architecture. We also allow for firms to differ in their technological characteristics, investigate how this affects their propensity to collaborate and study the resulting network architecture.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:C72, D43, L13
Uncontrolled Keywords:Contraction mapping, Stability, Uniqueness, Aggregate-taking behavior, Dominance solvability, Symmetric Games
Language:English
Date:February 2013
Deposited On:20 Feb 2013 15:46
Last Modified:14 Aug 2017 09:41
Series Name:Working paper series / Department of Economics
Number of Pages:33
ISSN:1664-7041
Official URL:http://www.econ.uzh.ch/static/wp/econwp112.pdf
Related URLs:http://www.econ.uzh.ch/static/workingpapers.php

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