Networks of Collaboration in Oligopoly

Arbeitspapier

In an oligopoly, prior to competing in the market, firms have an opportunity to form pair-wisecollaborative links with other firms. These pair-wise links involve a commitment of resources andlead to lower costs of production of the collaborating firms. The collection of pair-wise linksdefines a collaboration network. We study the architecture of strategically stable networks.Our analysis reveals that in a setting where firms are ex-ante identical, strategically stablenetworks are often asymmetric, with some firms having a large number of links while others havefew links or no links at all. We characterize such asymmetric networks; the dominant grouparchitecture, stars, and inter-linked stars are found to be stable. In asymmetric networks, thefirms with many links have lower costs of production as compared to firms with few links. Thuscollaboration links can have a major influence on the functioning of the market.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 00-092/1

Classification and Topics

• Classification: Wirtschaft
• Subject: Oligopol ; Wettbewerbsbeschränkung ; Forschungskooperation ; Unternehmensnetzwerk ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Goyal, Sanjeev ; Joshi, Sumit
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2000

Further information

• Handle: http://hdl.handle.net/10419/85683
• Last update: 10.03.2025, 11:43 AM CET