Collaborative Network Formation in Spatial Oligopolies

TL;DR

This paper investigates the stability of collaboration networks among firms in spatial oligopolies, identifying conditions for arbitrary degree sequence graphs to be stable collaboration structures.

Contribution

It establishes conditions under which any arbitrary degree sequence graph can be a stable collaboration network among firms in spatial oligopolies.

Findings

Certain degree sequences lead to stable collaboration networks

Conditions for stability depend on firms' strategic interactions

Flexible network structures can be stable in oligopolistic markets

Abstract

Recently, it has been shown that networks with an arbitrary degree sequence may be a stable solution to a network formation game. Further, in recent years there has been a rise in the number of firms participating in collaborative efforts. In this paper, we show conditions under which a graph with an arbitrary degree sequence is admitted as a stable firm collaboration graph.