Knowledge distance and R&D collaboration in Cournot oligopoly

A Cournot collaboration game is complemented with the hypothesis that the cost of R&D collaboration depends on firm’s directed knowledge distance with respect to potential R&D partners. The further hypothesis that directed distance may be non-uniform and pair-wise asymmetric reconciles theoretical predictions with qualitative evidence about concentration and multiplicity of components in industrial R&D networks. The welfare properties of sparse stable networks are also affected.