Competition and Networks of Collaboration

64 Pages Posted: 11 Aug 2017

See all articles by Nikita Roketskiy

Nikita Roketskiy

University College London - Department of Economics

Date Written: July 2017

Abstract

I develop a model of collaboration between tournament participants in which agents collaborate in pairs, and an endogenous structure of collaboration is represented by a weighted network. The agents are forward-looking and capable of coordination. They value collaboration with others and higher tournament rankings. I use von Neumann-Morgenstern stable sets as a solution. I find stable networks in which agents collaborate only within exclusive groups. Both absence of intergroup collaboration and excessive intragroup collaboration lead to inefficiency. I provide a necessary and sufficient condition for the stability of efficient outcomes in winner-takes-all tournaments. I show that the use of transfers does not repair efficiency.

Keywords: networks, tournaments

JEL Classification: C71, D85

Suggested Citation

Roketskiy, Nikita, Competition and Networks of Collaboration (July 2017). CEPR Discussion Paper No. DP12194, Available at SSRN: https://ssrn.com/abstract=3016780

Nikita Roketskiy (Contact Author)

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

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