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on Innovation |
| By: | Magazzini Laura (Department of Economics, University of Verona); Fabio Pammolli (IMT Lucca Institute for Advanced Studies Author-Name: Massimo Riccaboni; IMT Lucca Institute for Advanced Studies) |
| Abstract: | : We analyse the consequences of the increasing complexity of R&D on within- and between-patent competition in the pharmaceutical industry. The intensity of competition is measured by jointly considering the timing from market launch to patent expiry, the strength of between-patent competition as well as competition introduced by generic producers. A simple model is proposed that predicts the shrinking of product lifetimes in the presence of correlated parallel R&D projects and market portfolios. The model is tested using data on pharmaceutical products sold in Europe and in the US. Based on our model we are able to estimate the impact of R&D complexity and relatedness among R&D portfolios on the value of innovative drugs. |
| Keywords: | Patent value, innovation, R&D competition, Pharmaceutical industry. |
| JEL: | D23 D83 O34 O31 L13 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:ial:wpaper:3/2013&r=ino |
| By: | Ejsing, Ann-Kathrine (Danish Insurance Association); Kaiser, Ulrich (University of Zurich); Kongsted, Hans Christian (University of Copenhagen); Laursen, Keld (Copenhagen Business School) |
| Abstract: | Scientific knowledge is an important ingredient in the innovation process. Drawing on the knowledge-based view of the firm and the literature on the relationship between science and technology, this paper scrutinizes the importance of university scientists' mobility for firms' innovative activities. Combining patent data and matched employer-employee data for Danish firms, we can track the labor mobility of R&D workers from 1999 to 2004. We find that new joiners contribute more than long-term employees to innovative activity in the focal firm. Among new firm recruits, we observe that newly hired former university researchers contribute more to innovative activity than newly hired recent graduates or joiners from firms, but only in firms with a high level of absorptive capacity in the form of recent experience of hiring university researchers. We find also that firms' recent experience of hiring university researchers enhances the effect of newly hired recent graduates' contributions to innovation. |
| Keywords: | innovative activity, science-technology relationship, labor mobility |
| JEL: | O33 O34 C23 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7470&r=ino |
| By: | Castellacci, Fulvio; Lie, Christine |
| Abstract: | This paper presents a survey of the micro-econometric literature on the effects of R&D tax credits on firms’ innovation activities. We focus on one specific aspect that has not received sufficient attention in previous research: the sectoral dimension. Our meta-regression analysis (MRA) sets up a new database collecting a large number of firm-level studies on the effects of R&D tax credits and investigates the factors that may explain differences in the estimated effects that are reported in the literature. The main result of the MRA analysis is indeed that sectors matter. Micro-econometric studies that have focused on a sub-sample of high-tech industries have on average obtained a smaller estimated effect of R&D tax credits. The paper proposes a simple framework to investigate why the effects of R&D tax credits vary across sectors and points out new directions and hypotheses for future research. |
| Keywords: | R&D tax credits; R&D policy; sectors; meta-regression analysis |
| JEL: | H25 H32 O32 O38 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:47937&r=ino |
| By: | Igor Letina |
| Abstract: | When firms decide to invest in R&D, they have to choose not only the amount of resources to invest, but also which research projects to develop. This paper investigates the market portfolio of research projects. Contrary to most of the literature, which focuses only on the level of investment in innovation, this model captures both the variety of research projects undertaken and the amount of duplication of research. A characterization of the equilibrium market portfolio is provided. It is shown that an increase in the number of firms increases the variety of developed projects and increases the amount of duplication of research. An increase in the intensity of competition among firms leads to an increase in the variety of developed projects and a decrease in the amount of duplication of research. A characterization of the socially optimal portfolio is provided. It is shown under which conditions the market invests suboptimally in the variety and duplication of research projects. Market underinvestment in the variety of R&D projects is demonstrated for a large class of product market models. |
| Keywords: | Innovation, competition, R&D portfolio, market structure |
| JEL: | L13 L22 O31 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:127&r=ino |
| By: | Giulio Cainelli; Massimiliano Mazzanti; Alessio D'Amato |
| Abstract: | We present a joint theoretical-empirical investigation to assess the adoption by manufacturing firms of innovations aimed at increasing recycling and, consequently, reducing the use of material and waste in production processes. According to the recent emphasis on the 'external' factors stimulating innovation which often may be more important than the classic drivers, such as R&D, we address the role of local influences, such as policy environments and regional structural features. First, we analyse firms’ innovation adoption choices in a simplified technology adoption model augmented by discussions in the environmental innovation (EI) literature that rationalize the research hypotheses underlying empirical models. We frame our empirical analysis on an original integration of data from a firm survey (EU CIS2008 survey of manufacturing firms) and regional level waste related information obtained from Italian environmental agency waste reports. The EU CIS2008 was the first of these surveys to ask for information on EI adoption in the waste sector. Our econometric analysis shows that firms adopt EI on the basis of some relational factors, while drivers such as R&D have no impact. The evidence of our study supports the role of regional factors related to waste management and policy. For example, firms located in regions with better separated waste collection and waste tariff diffusion systems are more likely to adopt EI. Networking and agglomeration economies do not seem to have any effect. |
| Keywords: | waste and material reduction technology; innovation adoption; firm behaviour; waste policy; regional frameworks; agglomeration economies |
| JEL: | D22 Q53 Q55 |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:2013162&r=ino |
| By: | Arijit Mukherjee (School of Business and Economics, Loughborough University, UK) |
| Abstract: | It is generally believed that a weak patent protection makes the consumers and the society better off compared to a strong patent protection by increasing the intensity of competition if the weak patent protection does not affect innovation. We show that this conclusion may not hold if the innovator can take other non-production strategies, such as product differentiation, to reduce the intensity of product-market competition. A weak patent protection may reduce consumer surplus and social welfare by inducing product differentiation by the innovator. We show that the type of product-market competition and the market demand function play important roles in this respect. Hence, there can be an argument for a strong patent protection even if it does not affect innovation. |
| Keywords: | Patent protection; Product differentiation; Welfare |
| JEL: | D21 D43 L13 O34 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2013_06&r=ino |
| By: | Massimiliano Mazzanti; Davide Antonioli; Francesco Nicolli; Marianna Gilli |
| Abstract: | The paper investigates the extent to which the adoption of Information and Communication Technology (ICT) by firms affects the likelihood of adopting environmental innovations (EI). We also test empirically whether various types of ICT adoption and other innovation practices (R&D, techno-organizational change) are complementary inputs with respect to the introduction of specific environmental innovations. The analysis is based on two different data sources, which offer various views on ICT and EI relationships. The first draws upon the ICT and environmental innovations information contained in the EU Community Innovation Survey (CIS), the other on an original CIS like survey focusing on a large Italian industrial region, Emilia-Romagna. This survey contains information on the adoption of environmental innovations and some detailed information on ICT issues and other technological-organizational processes. We find that ICT adoption is robustly and positively correlated to EI in the EU. In addition, complementarity is characterizing the relationship between ICT and other innovation processes as a force behind EI, but it is not to be taken for granted. In fact, it appears a robust empirical fact with regard to general innovation capacity (R&D and ICT), though when we narrow down the focus to specific techno-organizational innovations, complementarity with ICT is rarely a pillar firm’s green strategies. Further research might focus on the complementarity between ICT and EI as an ‘asset’ promoting higher economic performances. |
| Keywords: | ICT; environmental innovations; complementarity; organizational change; CIS |
| JEL: | L60 O30 Q58 |
| Date: | 2013–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:2013132&r=ino |
| By: | Bradley, Samantha R. (RTI International); Gicheva, Dora (University of North Carolina at Greensboro, Department of Economics); Hassell, Lydia (University of North Carolina at Greensboro, Department of Economics); Link, Albert N. (University of North Carolina at Greensboro, Department of Economics) |
| Abstract: | The role of gender in entrepreneurship has been thoroughly investigated. However, less is known about gender differences in access to private investment when attempting to develop a new technology. In this paper we use data collected by the National Research Council of the National Academies to estimate differences between the probability that a female-owned firm and a male-owned firm, both conducting research funded by the Small Business Innovation Research (SBIR) program, will receive private investment funding to help to commercialize the funded technology. We find that female-owned firms are disadvantaged in their access to private investment, especially in the West and Northeast regions of the United States. |
| Keywords: | Private investments; Gender; Technology; Innovation |
| JEL: | L26 O31 O38 |
| Date: | 2013–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:ris:uncgec:2013_011&r=ino |
| By: | Enrica De Cian (Fondazione Eni Enrico Mattei, Euro-Mediterranean Center on Climate Change, Italy); Fabio Sferra (Fondazione Eni Enrico Mattei, Euro-Mediterranean Center on Climate Change, Italy); Massimo Tavoni (Fondazione Eni Enrico Mattei, Euro-Mediterranean Center on Climate Change, Italy) |
| Abstract: | This paper examines the dynamics of energy investments and clean energy Research and Development (R&D) using a scenario-based modeling approach. Starting from the global scenarios proposed in the RoSE model ensemble experiment, we analyze the dynamics of investments under different assumptions regarding economic and population growth as well as availability of fossil fuel resources, in the absence of a climate policy. Our analysis indicates that economic growth and the speed of income convergence across countries matters for improvements in energy efficiency, both via dedicated R&D investments but mostly through capital-energy substitution. In contrast, fossil fuel prices, by changing the relative competitiveness of energy sources, create an economic opportunity for radical innovation in the energy sector. Indeed, our results suggest that fossil fuel availability is the key driver of investments in low carbon energy innovation. However, this innovation, by itself, is not sufficient to induce emission reductions compatible with climate stabilization objectives. |
| Keywords: | Technological change and innovation, Energy investments, R&D Investments, Fossil fuel availability, Fossil fuel prices, Energy Intensity, Carbon Intensity |
| JEL: | O13 Q Q54 Q55 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2013.59&r=ino |
| By: | Ackermann, Malte |
| Abstract: | The notion that the word Innovation has been excessively used in various contexts has been stated numerous times, still there is no study which empirically examines this issue. This paper addresses this research gap by utilizing a quantitative content analysis on almost 4 billion documents in the News segment of the Database LexisNexis. The sample period ranges from 1980 to 2010 and allover encompasses 2,013,143 documents containing the word Innovation. The Augmented Dickey-Fuller test indicates that the time-series data is non-stationary and has to be integrated in order-one. The results of the regression analysis illustrate that the documents containing Innovation of the preceding year significantly predict the next year, indicating past dependencies. The quantitative content analysis showed that the relevance of the word Innovation has progressed by 132.62% from the beginning of the sample period (1980) to the end of the sample period (2010). From 1980 to 1994 the indications of Innovation remained relatively constant around 0.003% of the documents. In 1995 the importance of Innovation apparently begins to rise to the year 2000 when it reaches its peak. In 2001 the indication of Innovation begins to decline slightly again, but advances towards the end of the sample period again. In general, these findings indicate that the word Innovation has been used quite more often within the last decades, reaching its peak of usage around the turn of the millennium. -- |
| Keywords: | Innovation,Communication,Quantitative Content Analysis |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:martim:1302&r=ino |
| By: | OHNO Yuka |
| Abstract: | I construct a simple thee-period game to investigate the effects of patent infringement litigations and patent ownership by non-practicing entities (NPEs) on technology selection for a new product. A firm may choose to embed fewer high-tech features into the new product in order to avoid or delay potential patent infringement lawsuits. NPEs tend to bring patent infringement lawsuits later than practicing entities (PE). In contrast to commonly believed, the technology-adopting firm may be willing to incorporate more technology features when the potentially-infringing patents are owned by an NPE than by a PE. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:13050&r=ino |
| By: | Allain, Marie-Laure; Henry, Emeric; Kyle, Margaret |
| Abstract: | The sale of R&D projects through licensing facilitates the division of labor between research and development activities. This vertical specialization can improve the overall efficiency of the innovative process. However, these gains depend on the timing of the sale: the buyer of an R&D project should assume development at the stage at which he has an efficiency advantage. We show that in an environment where the seller is overconfident about the value of the project, she may delay the sale to the more efficient firm in order to provide verifiable information about its quality, though this delay implies higher total development costs for the project. We obtain a condition for the equilibrium timing of licensing and examine how factors such as the intensity of competition between potential buyers influence it. We show that a wide array of different explanations, based on differences in information, beliefs or risk profiles, lead to the same qualitative results. We present empirical evidence from pharmaceutical licensing contracts that is consistent with our theoretical predictions. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:27399&r=ino |
| By: | YAGI Michiyuki; MANAGI Shunsuke |
| Abstract: | This study replicates a model of Aghion et al. ("Competition and Innovation: An inverted-u relationship," <i>Quarterly Journal of Economics</i> 2005; 120(2):701-728), which suggests that an inverted-U relationship exists between competition and innovation. We apply patent data and a competition measure based on Japanese firm-level and industry-average data from 1964 to 2006. In a constant slope model using a full dataset, we find the same inverted-U relationship as did Aghion-Bloom-Blundell-Griffith-Howitt (ABBGH). In decade and industry fixed-effects slope models, we find the inverted-U relationship to be fragile. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:13062&r=ino |
| By: | Nabila Arfaoui; Eric Brouillat; Maïder Saint-Jean |
| Abstract: | This paper proposes an agent-based model to study the impact of European regulation REACH on industrial dynamics. This new regulation adopted in 2007 establishes a new philosophy in how to design environmental protection and health. For this reason, REACH appears as a privileged object of study to analyze the impact of regulation on innovation strategies of firms and the structure of market. Our model focuses on the interactions between clients and suppliers in order to take into account interdependencies in the heart of vertical relationships that are upset by the new principles introduced by REACH. The main contribution of this paper is to show, through an agent-based model, how different combinations of flexible and stringent instruments designed on REACH regulation (Extended Producer Responsibility, authorization process and restrictions) create the incentives and the constraints to shape market selection and innovation. |
| Keywords: | REACH |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2013-22&r=ino |
| By: | JINJI Naoto; Xingyuan ZHANG |
| Abstract: | In this study, we investigate how the innovative performance of local firms in host countries affects the structure of foreign direct investment (FDI) by multinational enterprises (MNEs) using Japanese firm-level data and patent application data for host countries of Japanese FDI at the United States Patent and Trademark Office for the period from 1995 to 2006. The structure of FDI is measured by the shares of local transactions and transactions with the source country and a third country by foreign affiliates of Japanese MNEs. Our estimation results imply that innovation by local firms in the same and related industries in host countries in Asia and Europe strengthens forward and backward linkages. We also find that innovation in the host country encourages transactions with the source country when the former is technologically advanced. Finally, our findings suggest that, in Asia, the innovative performance of local firms contributes to the development of regional production networks. |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:13060&r=ino |
| By: | Lucio Picci (University of Bologna); Luca Savorelli (University of St. Andrews) |
| Abstract: | New methods of analysis of patent statistics allow assessing country profiles of technological specialization for the period 1990-2006. We witness a modest decrease in levels of specialization, which we show to be negatively influenced by country size and degree of internationalization of inventive activities. |
| Keywords: | Patents; Internationalization; Specialization; Technological Sectors. |
| JEL: | O31 O34 |
| Date: | 2013–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:san:wpecon:1301&r=ino |
| By: | Toshiyuki Nakanishi (Graduate School of Economics, Kobe University) |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1308&r=ino |
| By: | Chu, Angus C.; Cozzi, Guido; Lai, Ching-Chong; Liao, Chih-Hsing |
| Abstract: | This study analyzes the growth and welfare effects of monetary policy in a two-country Schumpeterian growth model with cash-in-advance constraints on consumption and R&D investment. We find that an increase in the domestic nominal interest rate decreases domestic R&D investment and the growth rate of domestic technology. Given that economic growth in a country depends on both domestic and foreign technologies, an increase in the foreign nominal interest rate also decreases economic growth in the domestic economy. When each government conducts its monetary policy unilaterally to maximize the welfare of only domestic households, the Nash-equilibrium nominal interest rates are generally higher than the optimal nominal interest rates chosen by cooperative governments who maximize the welfare of both domestic and foreign households. This difference is caused by a cross-country spillover effect of monetary policy arising from trade in intermediate goods. Under the CIA constraint on consumption (R&D investment), a larger market power of firms decreases (increases) the wedge between the Nash-equilibrium and optimal nominal interest rates. We also calibrate the two-country model to data in the Euro Area and the UK and find that the cross-country welfare effects of monetary policy are quantitatively significant. |
| Keywords: | Monetary policy, economic growth, R&D, trade in intermediate goods |
| JEL: | O30 O40 E41 F43 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2013:15&r=ino |
| By: | Brewin, Derek G.; Arzandeh, Mehdi |
| Keywords: | Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:151863&r=ino |
| By: | McClintock, Anthea; Malcolm, Bill; Crean, Jason; Jackson, Tom; Heath, James |
| Abstract: | Information deficiencies make selecting investments in R,D & E projects a difficult and uncertain task. Gardner (2004) likened the challenges and uncertainties of choosing the right mix of R,D&E projects to that of recruiting football players or breeding racehorses. In this paper approaches are examined to improving the odds of selecting, from a myriad of choices, more of the investments that are likely to deliver sound economic, social and environmental outcomes in primary industries. Pragmatism rules. The approaches proposed are a pragmatic way of evaluating R,D&E investment opportunities ex ante under the conditions where research opportunities are almost unlimited and budgets limited and falling. |
| Keywords: | Ex ante evaluation, project selection, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods, |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare13:152169&r=ino |
| By: | Alston, Julian M.; Okrent, Abigail M.; Parks, Joanna |
| Abstract: | How much has food abundance, attributable to U.S. public agricultural R&D, contributed to the high and rising U.S. obesity rates? In this paper we investigate the effects of public investment in agricultural R&D on food prices, per capita calorie consumption, adult body weight, obesity, public health-care expenditures related to obesity, and social welfare. First we use an econometric model to estimate the average effect of an incremental investment in agricultural R&D on the farm prices of ten categories of farm commodities. Next, we use the econometric results in a simulation model to estimate the implied changes in prices and quantities consumed of nine categories of food for given changes in research expenditures. Finally, we estimate the corresponding changes in social welfare, including both the traditional measures of changes in economic surplus in markets for food and farm commodities, and changes in public health-care expenditures associated with the predicted changes in food consumption and hence obesity. We find that a 10 percent increase in the stream of annual U.S. public investment in agricultural R&D in the latter half of the 20th century would have caused a modest increase in average daily calorie consumption of American adults, resulting in small increases in social costs of obesity. On the other hand, such an increase in spending would have generated very substantial net national benefits given the very large benefit-cost ratios for agricultural R&D. |
| Keywords: | Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Public Economics, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare13:152174&r=ino |
| By: | Thomas J. Holmes; Ellen R. McGrattan; Edward C. Prescott |
| Abstract: | Despite the recent rapid development and greater openness of China’s economy, FDI flows between China and technologically advanced countries are relatively small in both directions. We assess global capital flows in light of China’s quid pro quo policy of exchanging market access for transfers of technology capital—accumulated know-how such as research and development (R&D) that can be used in multiple production locations. We first provide empirical evidence of this policy and then incorporate it into a multicountry dynamic general equilibrium model. This extension leads to a significantly better fit of the model to data. We also find large welfare gains for China—and welfare losses for its FDI partners—from quid pro quo. |
| Keywords: | China |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:488&r=ino |
| By: | Juraj Stancik (European Commission – JRC - IPTS) |
| Abstract: | The report provides a detailed analysis of the state of public Information and Communication Technologies (ICT) Research and Development (R&D) expenditures in the European Union (EU). We also provide an interim assessment of the Digital Agenda Target about doubling public ICT R&D expenditures. Furthermore, besides focusing on the EU, we put these expenditures side by side with public ICT R&D expenditures in the EU’s main counterpart, the United States of America (US). Our analysis, covering the period 2004-2011, shows that EU ICT GBAORD has been steadily growing and in 2011 it reached € 6.9 billion which represented over 7% of the whole public R&D funding. Regarding the comparison with the US, we conclude that the US government devotes more ICT R&D funds than all EU Member States governments together but this gap has been closing down and over the period 2004-2010 it decreased by 50%. |
| Keywords: | Research & Development, Digital Agenda for Europe, ICT, GBAORD |
| JEL: | C82 O38 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc82847&r=ino |
| By: | Debby Lanser; Ryanne van Dalen |
| Abstract: | This CPB Discussion Paper investigates the effect of receiving a grant from the Dutch Technology Foundation STW on the research output of an individual researcher. <strong>We find no evidence that STW grant receipt increases research output for the general funding programme (OTP) whereas the results indicate an increase in the number of scientific publications for the thematic programmes.</strong> <strong>Read also: <a href="http://www.cpb.nl/en/publication/up-or-out-how-individual-research-grants-affect-academic-careers-in-the-netherlands">CPB Discussion Paper 249</a></strong> STW funds application-oriented research by equally weighting academic quality and utilisation of submitted research proposals. Research output is therefore measured along these two criteria, that is, publications and citations for scientific productivity and publications with industry and patent applications for utilisation. STW roughly distinguishes two types of funding instruments, i.e. the Open Technology Programme (OTP) in which research proposals from different disciplines compete against each other and the thematic programmes on specific research themes with more prominent industrial involvement. We are able to identify causal effects of such a grant on research output by exploiting the discontinuity in the relationship between the priority scores assigned to each proposal and receiving an STW grant. We find no evidence that an STW grant has a positive effect on scientific productivity or utilisation for the OTP. However, we do find significantly positive effects of an STW grant on publication rates within the thematic programmes. Grant receipt in thematic programmes leads to six additional publications including one co-authored by industry professionals over the next four years. This academic discussion paper is an example of the CPB’s work on science policy. Another discussion paper is published simultaneously on the effects of individual research grants (NWO Vernieuwingsimpuls or IRI-grants) on academic careers (<a href="http://www.cpb.nl/en/publication/up-or-out-how-individual-research-grants-affect-academic-careers-in-the-netherlands">CPB Discussion Paper 249</a>). |
| JEL: | I23 J24 O38 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:248&r=ino |
| By: | Billand, P.; Bravard, C.; Kamphorst, J.; Sarangi, S. |
| Abstract: | Social networks, be it on the internet or in real life, facilitate information flows. We model this by giving agents incentives to link with others and receive information through those links. We consider networks where agents have an incentive to confirm the information they receive from others. Our paper analyzes the social networks that are formed. We first study the existence of Nash equilibria and then characterize the set of strict Nash networks. Next, we characterize the set of strictly efficient networks and discuss the relationship between strictly efficient networks and strict Nash networks. Finally, we check the robustness of our results by allowing for heterogeneity among agents, possibility of bilateral deviations of agents, and decay in network. |
| Keywords: | R&D COLLABORATION;NETWORK FORMATION;MULTI-MARKET OLIGOPOLIES |
| JEL: | C72 D85 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:gbl:wpaper:2013-06&r=ino |