Error message

Deprecated function: Array and string offset access syntax with curly braces is deprecated in include_once() (line 20 of /mnt/web104/a0/07/510451407/htdocs/includes/file.phar.inc).

Endogenous Network Formation in Patent Contests And Its Role as A Barrier to Entry

Printer-friendly version
Article
Author/s: 
Wouter Vergote and Marco Marinucci
The Journal of Industrial Economics
Issue number: 
4
Year: 
2011
Journal pages: 
529–551
In a setting of R&D competition, we study how collaboration affects strategic decisions during a patent contest, and how the latter influences the collaboration network structures the firms can form. We use an all pay auction approach to endogenize both network formation and R&D intensities, and to take heterogeneous and private valuations for patents into account. We find that the complete network is not always the only pairwise stable one. The other stable networks have the realistic property that some firms drop out of the contest. Thus, ‘weak’ cooperation can serve as a barrier to entry on the market for innovation.
Developed by Paolo Gittoi