Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
Empirical evidence documents that R&D networks among vertically related firms are very common. Yet there is currently no formal modeling of such networks. In this paper, we develop a model of R&D networks among manufacturers and their suppliers in order to examine which network architectures emerge in equilibrium, and what their implications are from a welfare viewpoint. Our analysis reveals that private incentives to form R&D networks align with societal ones when vertical relations are non-exclusive, but may conflict when vertical relations are exclusive. In terms of policy, stricter antitrust regulation of exclusive vertical relations may, under certain conditions, be desirable from a social viewpoint.