Fits and Misfits: Technological Matching and R&D Networks
Robin Cowan, Nicolas Jonard & Bulat Sanditov
#2009-042
This paper presents an economic model of R&D network formation through
the creation of strategic alliances. Firms are randomly endowed with
knowledge elements. They base their alliance decisions purely on the
technological fit of potential partners, ignoring social capital
considerations and indirect benefits on the network. This is sufficient
to generate equilibrium networks with the small world properties of
observed alliance networks, namely short pairwise distances and local
clustering. The equilibrium networks are more clustered than
“comparable” random graphs, while they have similar characteristic path
length. Two extreme regimes of competition are examined, to show that
while the competition has a quantitative effect on the equilibrium
networks (density is lower with competition), the small world features
of the equilibrium networks are preserved.
UNU-MERIT Working Papers
ISSN 1871-9872