Sharing Rules and Individual Incentives: Implications to Collaboration

Abstract

Economic agents collaborate and jointly produce value in a variety of contexts. Oftentimes, the application of an implicit or explicit “sharing rule” determines how this created value is allocated between the collaborators. The current article examines how the broader collaboration patterns in a population arise as a result of the individual incentives provided by these sharing rules.

Our analytical model reveals that sharing rules result in (i) (relative) homophily in the groups wherein group members are less likely to collaborate with people outside the group, (ii) decreased collaboration in the population as a whole, and (iii) decreased collaboration among the group that is (systematically) disadvantaged by the sharing rule. Finally, we use US patenting data to offer an empirical test, and we offer evidence that sharing rules influence collaboration patterns in patenting as predicted by our model.