78 research outputs found

    R&D network formation with myopic and farsighted firms

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    We study the formation of R&D networks when firms can be either myopic or farsighted.Stability leads to R&D networks consisting of either asymmetric components or nearly symmetric components. Farsighted firms have in average more collaborations but myopic firms can be central for spreading the innovation. We introduce yes-firms that form links subject to the constraint of non-negative profits. Yes-firms stabilize R&D networks that maximize social welfare. Finally, the evolution of R&D networks shows that nearly symmetric R&D networks will be rapidly dismantled, socially optimal R&D networks will persist many periods, while asymmetric R&D networks will persist forever

    Limited Farsightedness in R&D Network Formation

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    We adopt the horizon-K farsighted set of Herings, Mauleon and Vannetelbosch (2019) to study the R&D networks that will emerge in the long run when firms are neither myopic nor fully farsighted but have some limited degree of farsightedness. We find that a singleton set consisting of a pairwise stable network is a horizon-K farsighted set for any degree of farsightedness K ≥ 2. That is, each R&D network consisting of two components of nearly equal size satisfies both horizon-K deterrence of external deviations and horizon-K external stability for K ≥ 2. On the contrary, each R&D network consisting of two components with the largest one comprising three-quarters of firms, predicted when all firms are fully farsighted, violates horizon-K deterrence of external deviations. Thus, when firms are homogeneous in their degree of farsightedness, pairwise stable R&D networks consisting of two components of nearly equal size are robust to limited farsightedness

    R&D network formation with myopic and farsighted firms

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    We study the formation of R&D networks when each firrm benefits from the research done by other firms it is connected to. Firms can be either myopic or farsighted when deciding about the links they want to form. We propose the notion of myopic-farsighted stable set to determine the R&D networks that emerge in the long run. When the majority of firms is myopic, stability leads to R&D networks consisting of either two asymmetric components with the largest component comprises three-quarters of firms or two symmetric components of nearly equal size with the largest component having only myopic firms. But, once the majority of firms becomes farsighted, only R&D networks with two asymmetric components remain stable. Firms in the largest component obtain greater profits, with farsighted firms having in average more collaborations than myopic firms that are either loose-ends or central for spreading the innovation within the component. Besides myopic and farsighted firms, we introduce yes-firms that always accept the formation of any link and never delete a link subject to the constraint of non- negative profits. We show that yes-firms can stabilize R&D networks consisting of a single component that maximize the social welfare. Finally, we look at the evolution of R&D networks and we find that R&D networks with two symmetric components will be rapidly dismantled, single component R&D networks will persist many periods, while R&D networks consisting of two asymmetric components will persist forever

    Trust and Manipulation in Social Networks

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    We investigate the role of manipulation in a model of opinion formation. Agents repeatedly communicate with their neighbors in the social network, can exert effort to manipulate the trust of others, and update their opinions about some common issue by taking weighted averages of neighbors' opinions. The incentives to manipulate are given by the agents' preferences. We show that manipulation can modify the trust structure and lead to a connected society. Manipulation fosters opinion leadership, but the manipulated agent may even gain influence on the long-run opinions. Finally, we investigate the tension between information aggregation and spread of misinformation

    Strongly Rational Sets for Normal-Form Games

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    We introduce the concept of minimal strong curb sets which is a set-theoretic coarsening of the notion of strong Nash equilibrium. Strong curb sets are product sets of pure strategies such that each player’s set of recommended strategies contains all actions she may rationally select in every coalition she might belong to, for any belief each coalition member may have that is consistent with the recommendations to the other players. Minimal strong curb sets are shown to exist and are compared with other well-known solution concepts. We provide a dynamic learning process leading the players to play strategies from a minimal strong curb set only

    Communication structure and coalition-proofness – Experimental evidence

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    The paper analyzes the role of the structure of communication—i.e. who is talking with whom—in a coordination game. We run an experiment in a three-player game with Pareto ranked equilibria, where a pair of players has a profitable joint deviation from the Pareto- superior equilibrium. We show that specific communication structures lead to different 'coalition-proof' equilibria in this game. Results match the theoretical predictions. Subjects communicate and play the Pareto-superior equilibrium when communication is public. When pairs of players exchange messages privately, subjects play the Pareto-inferior equilibrium. Even in these latter cases, however, players’ beliefs and choices tend to react to messages, despite the fact that these are not credible
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