Endogenous formation of research coalitions with spillovers

Abstract

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Market Power and Incentives to Form Research Consortia

“…The coalition formation games analyzed here share the main features of the frameworks proposed by Bloch (1996Bloch ( , 2002, Ray and Vohra (1999), Yi (1997, 1998, and Yi and Shin (2000). Consider as a benchmark a standard Cournot oligopoly 9 with n firms and a linear inverse demand function 10…”

“…An important aspect of the economics of these coalitions is that they create externalities (negative or positive) for nonmembers. At the same time new approaches to noncooperative game theory have been produced (e.g., Ray and Vohra, 1999;Bloch, 1995Bloch, , 1996Yi, 1997Yi, , 1998Yi and Shin, 2000) providing a framework to analyze the endogenous formation of coalitions. Coalition formation has mainly been modeled as a two-stage game.…”

“…The analysis of cost-reducing alliances can be traced back to the literature on RJVs initiated by Katz (1986) andD'Aspremont andJacquemin (1985) in the duopoly case. Yi (1998) and Yi and Shin (2000) propose general models of cost reducing alliances and RJVs.…”

“…Broadly speaking these models can be divided into two groups: those under an "Open Membership Rule", where players cannot exclude other players from joining the coalition (e.g., Selten, 1973;D'Aspremont et al, 1983;Bloch, 1995Bloch, , 1996and Yi and Shin, 2000), and those under an "Exclusive Membership Rule", where exclusion is allowed (e.g., Hart and Kurz, 1983;Bloch, 1996;Ray and Vohra 1999). Different rules of coalition formation lead to different predictions about the stability of the coalition structure.…”

Impact of equity and equality on stability and collusion in a decentralized network

“…1 The existing studies focusing on stability of coalitions-single tiered network settingstypically consider either completely collusive-known as cartels-or completely noncollusive-cost-reducing coalitions such as research joint ventures-structures. It is well known that instability is a major limitation of both forms of coalitions (e.g., Donsimoni et al 1986;Yi and Shin 2000). The literature provides insights into predicting which coalitions with given coalition form are likely to emerge in the market and how they impact the players' performances in a variety of settings.…”