


Yasunori Okumura 

''A note on Propositions 7 and 8 of Goyal and Moraga (2001)'' 
( 2007, Vol. 12 No.28 ) 


We will show that some results in Goyal and Moraga (2001), RAND Journal of Economics 32(4), are incomplete. The results are the social welfare and the total profit of the firms in the complete network is lower than those in some networks. They focus on the symmetric network gk where k is the number of links of each firm and show that the social welfare (the total profit of the firms) in the complete network gn1 is lower than that in gn2 where n is the number of the firms. However, their proofs are incomplete because there is no gn2 if n is odd. Therefore, this paper gives the complete proof of their result. That is, since there is gn3 if n is odd, we show the social welfare (total profit) in the gn1 is lower than that in the network gn3. 


Keywords: Symmetric networks: Network formation: R&D Oligopoly Graph theory 
JEL: L1  Market Structure, Firm Strategy, and Market Performance: General C7  Game Theory and Bargaining Theory:General 

Manuscript Received : Oct 21 2007   Manuscript Accepted : Oct 22 2007 


