Cooperative R&D networks among firms and public research institutions

This paper provides theoretical background to the increasing R&D cooperation among firms and public research institutions. We find that R&D spillovers may impede cooperation among firms or research institutions even when the cost of forming a link is negligible. Further, the presence of heterogeneous players results in different concepts of network regularity but also increases the number of possible pairwise stable networks. Consequently, stronger concepts of stability are needed to study networks in which players are not homogeneous.