Stable Research Networks with Bargaining and Heterogeneous Costs

Abstract

The association between individuals with the same background is usually easier, but this may switch if complementary skills are necessary to complete a collaboration. Considering a world where agents are of one of the two possible types, we study the pairwise stability of stationary networks in which agents bargain in an infinite-horizon game a la Manea. Heterogeneity of agents leads to heterogeneous costs of linking and developing collaborations. Our key results include that, when complementarities between types are strong enough, bipartite components like odd lines, stars and star-like trees can become stable if no link connects two players of the same type.